Benin Republic issued first dollar-denominated bonds (14-year bond) and recorded an oversubscription at $5 billion, even though it only tapped $750 million to demonstrating strong investor confidence in the country’s macroeconomic forecast.
The country’s 2024 budget would be financed using the revenues from the 14-year bonds, which were issued at an 8.375% interest rate, according to Finance Minister Romuald Wadagni.
This bond sale happened soon after the Ivory Coast’s $2.6 billion oversubscribed Eurobond auction.
The yield rates on the Benin bonds closely resemble those of some of the bonds issued by Ivory Coast on the international bond market.
Gemcorp Capital Management’s chief economist, Simon Quijano-Evans, told clients he was surprised that Benin was offering its first USD external bond with a yield that was as low as or lower than that of an equal USD bond from the Ivory Coast.
Important Points
Over the 2024–25 timeframe, the Benin Republic—one of Sub-Saharan Africa’s economies with the quickest rate of growth—is expected to see average GDP growth of 6.4%.
Strong macroeconomic stability has been shown by the nation, as evidenced by the inflation rate, which increased little from -0.20% in November 2023 to 0.40% in December 2023.
