25, June 2021
Cameroon plans to tap international markets for the second time in six years as the Central African nation seeks resources to finance an expanded budget.
The government may sell a 10-year or 12-year euro-denominated bond after a series of investor meetings that commenced Wednesday, according to people familiar with the transaction. The country appointed Citigroup Inc., JPMorgan Chase and Co. and Societe Generale SA to manage the sale, the people said.
The government increased proposed spending in its 2021 budget by 13% to 5.5 trillion CFA francs ($10 billion) as it seeks to reduce debt and pay for programs to counter the impact of the Covid-19 pandemic.
Cameroon raised $750 million at 9.5% in its international debt-market debut in 2015. The yields on those bonds maturing in 2025 have dropped 187 basis points this year, and were at 5.06% by 12:30 p.m. in London. The country has made an offer to buy back some of the securities, depending on the success of the new offer.
The sale comes at a time when debate about the speed at which the U.S. Federal Reserve will roll back stimulus is putting upward pressure on global yields. Negative yields on German benchmark 10-year bonds are inching closer to zero, trading around -0.173% on Thursday.
Cameroon, assessed at sub-investment grade B by Fitch Ratings and a notch lower by S&P Global Ratings, follows Benin, Ivory Coast and Senegal as sub-Saharan African nations to raise euro-denominated debt this year, and Ghana and Kenya that sold dollar bonds.