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Alba Iulia
Thursday, February 27, 2020

15 firms keen on $700m Eurobond

Economy 15 firms keen on $700m Eurobond

FIFTEEN potential book runners and five legal advisors have expressed interest in Zambia’s debut Eurobond of as much as US$700 million. The Zambia Public Procurement Authority (ZPPA) is currently evaluating the bids for both the book runner and the legal adviser.

Bank of Zambia deputy governor of operations, Bwalya Ng’andu expressed confident that results for the successful winners for both the book runner and the legal adviser would be announced by the ZPPA soon.

A Eurobond is an international bond issued in a currency other than the currency of the country or market in which it is issued. Dr Ng’andu said Zambia will have a successful bond issuance going by the list of companies that expressed interest in it.

“What is interesting is that we have attracted some of the best and renowned companies, which tells us that there is a lot of interest in the Eurobond and this shows that there is a lot of confidence in the Zambian economy. We are anxious to see the outcome,” he said.

Dr Ng’andu said in an interview in Lusaka last week. He however could not name the firms that have expressed interest for both book runners and legal advisors. Some bidders that have expressed interest for Zambia’s US$700 million bond include HSBC Holdings Plc and Rabobank International’s Zambia National Commercial Bank.

Recently, Finance Minister Alexander Chikwanda said Zambia will sell a 10-year Eurobond in 2012 to raise money for infrastructure and other construction projects. The bond that was expected to be issued last year but was put on hold as the European debt crisis curbed demand for debt.

Zambia will join other sub-Saharan African nations such as Nigeria, Ghana, Gabon, Senegal, Seychelles and Namibia, which have sold international debt.

[Zambia Daily Mail]

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  1. Yes mr Chilekwa. This is commercial borrowing from the market. I only hope its not chimbwi no plan i.e., if it is for infrasture, let the identified infrasturre be put in place and meet the required standard. There should be no Thefts otherwise, the usual irregular tender, over priced, chekela ko etc will lead to bad results and merely burden tax payers and our children in the next 10 years.

  2. What Are Bonds?
    Have you ever borrowed money? Of course you have! Whether we hit our parents up for a few bucks to buy candy as children or asked the bank for a mortgage, most of us have borrowed money at some point in our lives.

    Just as people need money, so do companies and governments. A company needs funds to expand into new markets, while governments need money for everything from infrastructure to social programs. The problem large organizations run into is that they typically need far more money than the average bank can provide. The solution is to raise money by issuing bonds (or other debt instruments) to a public market. Thousands of investors then each lend a portion of the capital needed. Really, a bond is nothing more than a loan for which you are the lender. The organ

  3. For you Mr Chilekwa and Others that need to know about Bonds, I did some Economics and Accountancy so i understand these issues.

    • Well, we are interested in you telling us what it means, & NOT JUST TELLING US THAT YOU KNOW OR HAVE STUDIED!! Once you have done so, it will be obvious THAT YOU INDEED HAVE STUDIED WHAT YOU CLAIM, & NOT JUST CLAIMING FOR THE SAKE OF DOING SO!!!

  4. You can also check it out on google. Simple way to learn by yourself. In simple terms zambia is seeking to borrow capital from reputabal financial institutions to implement its projects. The commitment will strectch up to 10yaers unless re-negotiated otherwise.

  5. School is important. This shows that a lot o blogers are just street chaps…
    Very few commments! If it was about politics, we could have seen a lot of Bainzi here!

    • Well, depends what you mean by “School”, e.g. a “School of Fish”, might not be as educated as you might want to apply the term!!!!

  6. This will be an interesting one to follow. Fingers crossed that we raise much needed finances for developmental programs and as someone has pointed out above I hope we have looked at all the major infrastructure needs in order to both determine a solid framework for our long term evolvement as well as provide a solid financial environment to continue to attract the best potential bidders.

  7. PF has a solid plan to develop zambia.Just watchout for massive infrustrature development next year and it is expected that millions of youths will be employed.UPND knows this hence their constant and persistant talk about 90 days politics and wishes of Chilufya to die soon.This Cobra will suprise a lot of so called educated under fives.They were also hoping for the Barotseland Agreement 64 impasse to deepen but again it wont work.Everyone wants dialogue.I even wonder what the under fives and watchdog will be saying in two years time.They were very happy when flirch rated us negatively so as the issuence of euro bonds fails,but baloba ilya uma.They are even failing to report about this very important issue

  8. I wouldn’t worry about the numbers of bloggers. It is just nice to come across pages where insults do not cloud underlying issues. Good to see explanations and translations for others over self righteous smirks and slights over education or more to the point pompous financial intellect :) Share knowledge to reduce ignorance. It doesn’t cost you anything and you might gain online kudos… I’m nostalgic for the warm, helpful, joke sharing and positive Zed I grew in so forgive my interjections :)

  9. Whilst it is a good idea to issue this bond, I wonder what can be accomplished with a 500 million Euros (approx USD 700m). This is because contractors in Zambia overprice everything such that to tar a road in Zambia costs almost a million dollars per kilometre and just a fraction of that in neighbouring countries. With this money I hope they can use it wisely (many smaller projects that can improve lives will be ideal).

  10. So how does this borrowing differ from borrowing from the IMF and World Bank? Pardon my ignorance. I am financially illiterate

    • IMF and World Bank will only lend you when the markets can not at reasonable rates usually when you’re in a crisis and their loans come with a lot of strings attached as they play the role of the lender of last resort. In lay mans language, if your country is well managed and sound, you borrow cheaply from the international markets but when the politicians mismanage the economy to near bankruptcy then it is only IMF and Would Bank who can help you.  

  11. Why can’t it be a China Bond. I trust the Chinese more than Europe. They never enslaved or colonized any African country. Plus with mass media we can talk them down on their labor practices they even employ in their own home land. Am I the only smart African here that sees that this is not a wise move.

    • Euro Bond does not really mean borrowing in Euro or from Europe. It simply means borrowing in any currency rather than own currency of the country, in our case Zambian Kwacha. With Euro bond Zambia will be able to borrow say Chinese Yuan, US Dollar, Japanese Yen or the British Pound denomination in form of  Euro bond.
      Its kind of confusing for non economists as it is a misnomer. 

  12. Thank you “‘Old Munali Boys”‘ for outlining the truth and educating the rest of us on the definition of a bond. We need more articles like this to stop the political noise related to most LT posts.

  13. Simple explanation: Bonds or “Instruments” (i.e. to sound sophisticated”) are pices of paper that the person or entity trying to raise money offers for sale, attaching a Selling price with a promise to gain value at a promised rate at time of maturity, e.g. buy it for 1 ngwee, then 10 years later, will be worth 10 kwacha when you you return that piece of paper & it is guaranteed that the seller will buy back from you, so for you 1 ngwee, you get back 10 kwacha. SO GRZ IS OFFERING PEOPLE TO BUY PIECES OF PAPER WITH FEW DOLLARS & PROMISE TO PAY THEM BACK WITH SO MANY!!! So you see, trying to sound sophisticated, they say they are selling bonds & NOT BORROWING!!!!!!

  14. @Mwanakwitu – Do not call yourself “smart” when, for instance, you would choose to invest in a China issued Bond over a European bond solely based on the fact that China never enslaved any African nation.  We can learn from the past but lets as a people keep focused on bettering ourselves today and in the future …and not dwell on the past. Times have changed. We are in the 21st century after all.. 

    I am not saying that China is not a worthy choice to have as the financier of these bonds but we need to address the relevant issues pertinent to the case and not cluster judgment and tone based on grievances. Much kudos to everyone positively contributing to the knowledge and understanding of others via explanations examples etc..that’s what we need. 

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