Cameroon Considers Dollar Bond Issue

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In the market: Cameroon is gauging investors’ appetite for a dollar-denominated bond. iStockPhoto

Cameroon is considering issuing a dollar-denominated bond in what would be its first foray into the international sovereign bond market.

The bond offering would be the latest in a series of U.S. dollar issues this year from African countries including Tunisia, Egypt, Ivory Coast, Zambia and Ghana, according to Dealogic data.

Cameroon has hired Société GénéraleCIB and Standard Chartered Bank asjoint lead managers to arrange a series of fixed-income investor meetings in the U.S. and Europe, starting on Nov. 5, according to one of the lead managers, who added that a U.S. dollar-denominated benchmark offering could follow, subject to market conditions.

The Central African nation’s economy is on track to expand by 6% this year, the International Monetary Fund forecasts, thanks to strong growth in construction and financial services and an increase in oil production. The IMF warned, however, that growth could be constrained by low oil prices and by the country’s efforts to combat terrorism.

Cameroon is rated at ‘B’ with a stable outlook by both Standard & Poor’s and Fitch. Affirming its rating on Oct. 23, S&P said it expects Cameroon’s economy to grow by at least 5% annually between 2015 and 2018, but noted that the country faces risks relating to weak institutions, issues over presidential succession, and widening fiscal deficits.

Investors have responded enthusiastically to this year’s frontier-market bond issues despite concerns that an anticipated rise in U.S. raises interest rates could trigger further volatility in emerging markets. And next year could see a continued strong supply of African bonds, according to Barclays , which expects $16 billion to $17 billion in new issues, including around $7 billion to $8 billion from Sub-Saharan countries.

Source : http://blogs.wsj.com/frontiers/2015/11/04/cameroon-considers-dollar-bond-issue/

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