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Tanzania plans global bond market debut

By Reuters | October 24th 2014
By Reuters | October 24th 2014

Dar; Tanzania: Tanzania plans to make its first foray into the global bond market in 2015/16 after years of delay in securing a credit rating, Finance Minister Saada Salum said on Thursday.
Salum said the East African country would issue a long-awaited Eurobond, without giving details on its value. Government officials have said in the past they want to raise up to $1 billion (Sh89 billion).

Tanzania will join a borrowing spree by African governments searching for new ways to pay for roads, power stations and other infrastructure as foreign aid falls. Analysts have warned of the risks of rising debt levels.
“We expect to issue the Eurobond in the 2015/16 financial year. We plan to complete the whole thing of procuring floating agencies and getting a credit rating by March-April next year,” Salum told Reuters.
“The process has been delayed in the past because this is a new thing for us and we want to proceed with caution. The amount of the Eurobond will be determined by the assessment of the credit raters,” she added.

She said Tanzania would pick “one or two” out of the three big rating agencies - Standard & Poor’s, Moody’s and Fitch - next year.
Tanzania first announced its plans to issue a Eurobond in 2008, but the move has been pushed back every year due to what officials have described as protracted “legal and regulatory” procedures.

In 2007, Ghana became the first African beneficiary of debt relief to tap international capital markets, issuing a $750 million 10-year Eurobond. Since then, previously debt-burdened countries such as Senegal, Nigeria, Zambia and Rwanda have all joined in.   —Reuters

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