Ethiopia completes $1 billion debut Eurobond

Ethiopia has completed raising $1 billion (Sh90 billion) with its debut Eurobond with a term of 10 years and coupon rate of 6.625 per cent, in an offer that had been “oversubscribed”.

Ethiopia is the latest African country to receive a strong response on its first foray into the international debt markets. Investors have been eyeing Africa’s sturdy growth rates and Ethiopia’s economy is now expanding by about nine per cent a year.

Financial adviser

“Ethiopia attracted high quality investor interest despite a challenging market environment,” the Finance ministry said, adding the 10-year maturity aimed to create a benchmark and proceeds would be invested in infrastructure.

Deutsche Bank and JP Morgan were the lead managers. The ministry said a French firm had acted as financial adviser. Despite strong growth rates, analysts said Ethiopia had limited hard currency earnings, making its debt-servicing capacity weaker than some African states.