EIB launches its first international Ghanaian Cedi bond
-EN
- Extends EIB’s track record of contributing to the development of debt markets in African EU Partner countries
- Complements EIB’s activities in Ghana as a lender
- First synthetic format with payments in EUR
- 10.75% Coupon, 2 year maturity
The European Investment Bank (EIB), the Bank promoting European objectives, rated Aaa/AAA/AAA (Moody’s/Standard & Poors/Fitch), today launched its first international bond issue denominated in GHS (Ghanaian Cedi).
The issue is for an amount of GHS 20,000,000 (EUR 15m approximately) and carries an annual coupon of 10.75%. The bond is synthetic, with settlements and payments in Euros, as determined by the Calculation Agent based on the EUR/GHS exchange rate. The bond has an issue price of 100% and matures 26 October 2009. The transaction was lead managed by Barclays Capital & Barclays Bank of Ghana.
The bond follows recent initiatives by EIB in African currencies in the international capital markets - in Botswana pula, Egyptian pounds and Namibian dollars. This transaction is a continuation of EIB’s aim to explore funding possibilities in relevant local currencies, notably with a view to supporting development of local currency markets but also marking a step towards potential future lending in local currency.
The EIB’s issuance activities in African countries complement lending activities in the region where the Bank has been a development partner for some decades. Current cooperation is based on the Cotonou Partnership Agreement of 2000. In the past five years, the EIB has signed loans for over EUR 140m in Ghanafor projects covering a wide range of sectors, notably industry and energy.
Comments from EIB and the Lead Manager on the Bond Issue:
EIB’s Richard Teichmeister, Head of Funding for Europe (ex-Euro) and Africa, said: “This issue provides a top-quality alternative for investors in a market with very limited supply. It gives the EIB another opportunity to expand its presence in African Partner country currencies in a way that contributes to the development of the local capital market by directing international investors’ attention to African debt markets. “
Barclays Capital, Lead Manager: “Ghana has attracted a great deal of interest from international investors this year. With political stability, accelerating growth and the recent discovery of oil the country has become the first West African sovereign to issue in the international bond market. This local currency issue is another milestone, with Barclays Capital and Barclays Bank of Ghana joining forces with the EIB to advance the financial markets in Africa.”
Background information on EIB
EIB funding strategy and results in 2006
The Bank’s funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. Under its 2006 funding programme the Bank raised EUR 48bn in 24 different currencies. The Bank’s three core currencies (EUR, GBP, USD) accounted for 83% of funding. The Bank has so far raised over EUR 44 billion under its 2007 programme.Profile of EIB
The European Investment Bank, based in Luxembourg, was set up under the Treaty of Rome in 1958. The Bank’s consistent AAA rating is underpinned by firm shareholder support, a strong capital base, strong asset quality, conservative risk management and a sound funding strategy.The Bank’s shareholders are the member states of the European Union. The primary focus of EIB’s lending activities is to finance projects that promote balanced regional development and economic and social cohesion in an enlarged EU. The Bank’s other lending priorities are as follows:
- Support for small and medium-sized enterprise (SMEs)
- Implementation of the Innovation 2010 Initiative (i2i): this program is designed to support the development of a knowledge-based, innovation driven economy
- Development of Trans European Networks, in the fields of energy, telecommunications and transport
- Environmental protection and improvement
- Sustainable, competitive and secure energy
- Support of EU development and cooperation policies with Partner Countries, in particular through the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and the Cotonou Agreement focusing on African, Caribbean and Pacific countries.
The majority of the Bank’s outstanding loans have been for infrastructure projects, with the largest share taken by transport projects. Other key areas of infrastructure lending have been the energy, water and telecommunications sectors. Apart from infrastructure, other areas of lending have included global loans, involving lending via financial intermediaries, as well as loans to industry, healthcare, education, services and agriculture.