Germany’s Deutsche Bank says Zambia’s US$750 million international bond is exceptional and terrific for an inaugural bond of an emerging market country.
Speaking at Deutsche Bank Offices on Wall Street in New York City in USA, Deutsche Bank head of bond syndicate Nigel Cree said foreign investors were interested in Zambia’s economy.
“This is an exceptional and terrific result for an inaugural bond deal from the emerging markets countries,” Mr Cree said. “The response from the global investors from Asia, Europe and the United States was overwhelmingly positive to the story that Zambia was telling about their [Zambians] economy and the future of their economy.”
Deutsche Bank and Barclays Bank were the lead managers and joint book runners for Zambia’s bond.
And Bank of Zambia deputy governor – operations, Dr Bwalya Ng’andu says the Government’s prudent management of the economy and political stability are attracting foreign investors.
Dr Ng’andu, who was part of the Zambian delegation that undertook a two-continent roadshow seeking investor to back Zambia’s US$750 million bond, said the success of the tour was a vote of confidence.
“The fact that we got so many investors coming demonstrates confidence that there is political stability in the country, which is important for them, and that the way we are managing our economy is prudent and effective, and they are happy with it,” said Dr Ng’andu.
Dr Ng’andu said Zambia had now built “a relationship with investors” which would be relied upon whenever the country wants to mobilise resources.
The central bank’s deputy chief said the US$750 million bond had set a benchmark at which Zambia could access future credit from the international market.
“It’s also a benchmark which the private sector can use to borrow money from the international market,” said Dr Ng’andu.
Zambia successfully issued its inaugural 10-year bond on Wall Street, the world’s topmost financial hub, to the tune of US$750 million last Thursday. This was on account of the exceedingly large order book with a total subscription of US$11.9 billion, at least 24 times over the intended US$500 million, making it the largest order book for sub-saharan Africa.
This statement was made available to the media by Zambia’s First Secretary for Press and Public Relations Permanent Mission at the United Nations in New York, Mr CHIBAULA D. SILWAMBA.
Don’t start sharing that money…we don’t want to find money buried in the belly of the earth to the curse of our children due to this debt….however, kudos to the PF but we want to see infrastructure development and attention on our health facilities not only in Lusaka but Zambia at large. Let us use this money prudently!
Zambia’s economy is improving.In 10 yrs time, i can see light at the end of the tunnel and this country will be seen as one of the nations that has improved within a short a time.This government has to be recommended for the hard work being done.
Who would be happy to lend money at prohibitive interest rates. This is Kaloba, Zambia will pay heavily for this if the money is not well invested or put to good use with remarkable returns. The picture does’nt show seriousness on our part, celebrating borrowed money. Can’t we wait until we have got the profits/returns from the loan and celebrate.
#3 Paolo Di Canino,thats what you think Ben Kangwa?The country is actually sliding back into high levels of poverty under under uncle’s leadership(CNP) and his tribe mates.They have to get out before 2016 or else it is trouble in the country.We also know that your uncle is nearing his expiry date hence his all day long in bed cant even stand for two minutes.
Your hate for others will certainly bring roresult into others developing hate for you and your tribe. I n this age and error on itermarriages your points may not hold water as is water under the bridge.
Tossing for Nkongole. Atase!
look at how he is holding the champagne glass,down on its neck. simple physics,the chances of toppling and spilling the content is higher because the surface area is smaller down the neck. but if he held it a bit higher,kwati the blood sucking money lender who is just saying in his mind ati, twaminyenga bena zambia, we will soon have you by the balls,because we know you dont have a proper plan for the nkongole you just got,it would have been better ko!!!!!
The principle is to use other people’s money to grow your business. Having easy access to money is step number one to achieving this goal. This is good news.
We have heard enough of this bond. We know what it is and look forward to results in terms of prudent utilisation and paying back the debt. Can we now work. No need to toss. I want to see this same picture 5 to 10 yrs from now reflecting on the debt and developmental strides we will have made out of the money.
Believe it or not, this is a serious mistake Zambia has made to date. Ask yourselves, why is US and Europe grappling with huge economic difficulties and the large growing divide between the wealthy and the poorest of the poor? Why are wealthiest European nations and US not bailing out Grecee, Spain, Portugal or Italy? Why is the EU facing the possibility of total collapse? Why are most European nationals flooding most African countries in search of employment opportunities? Why are most US and Europeans firms partnering with companies which have been running their operations exclusively on the African continent in this day and age, yet we know that most US & European firms had always maintained that Africa is too risky for business? Zambians wake up there are strangling your economy.
Most likely this germany guy has a cut through commision or some how. Why celebrate when you getting a loan…it does not make sense at all. how about? the so called foreign reserves zambai has ? zambia has plenty copper but they are poor amazing.
The German guy is Scottish actually, born and raised!
No one is willing to invest in Europe so if a Sub-Sahara African assets comes up it gets over subscribed 24 times. So private capital is there sitting in Europe and the US. All one needs is to package their proposal properly and they will get the finance.
Thats where we go wrong, what is there to celebrate about debt?This is trouble for the nation.We are building a debt and we are shouting to the world.If we manage our resources properly we wouldnt need all this rubbish
Sata and PF congratulations for increasing us our external debt from $1.5billion to $2billion, you are Geniuses . But please may ask what did you do with the $2.2billion MMD left for you in reserve which prompted you to go for this kaloba
Mwanawasa worked hard to have the 7billion debt written off then there comes another gvt celebrating building debt again.Within a few years its already over 2billion where are we going?
BA UPND SHOULD JUST ADMIT THAT ON THIS ONE, PF HAS HIT YOU BELOW THE BELT. SO YOU HAVE NOTHING TO TALK ABOUT. JUST SHUT UP. AND BY THE END OF FIVE YEARS ALL THE 90 DAYS PROMISES WILL BE FULFILLED AND YOU WILL HAVE NOTHING TO ”PULL HIM DOWN” (PHD) ABOUT.
The EuroBond ($750million) its good news but the real issue is managing it properly. Let it be used to build infrastructure i.e. school, roads, hospitals, universities etc things that will stimulate growth of the economy. Economic growth is not so much foreign investment but investing in your people: more educated Zambians (Universities,schools) who are health (Hospitals,clinics) who can move there produce and services easily (Roads, railway) and no doubt reduce unemployment through construction of said infrastructure! the key is prudent management of the Bond/Loan!!!
Infrustructure should also include the internet, banking system, electricity, and clean water if we are to attract foreign investment. Let’s intergrate our economy in real terms. We also need better healthcare system. There is a lot of medical tourism around the world right now, and if this is taken advantage of, we could do better. Certainly, we have a lot of medical doctors in the diaspora who could be be given incentives to invest home and because they were trained abroad, they could be trusted by foreign patients who might be looking for cheaper medical care alternatives. India, Malaysia, and other Asian nations are benefiting from this kind of business. The internet can be a huge facilitator for such endeavors.
This is where the credit rating comes in. I wonder what our rating is; obviously not tripple A, which means were are a high risk borrower and our interest rate on this debt will be higher. We will have to invest prudently so that the rate of return should be higher that the borrowing rate.
A few 100yrs ago white colonialists came and tangled some ornaments in front of our chiefs who happily sold of our land.The picture of Miles Sampa and the Deutsche bank head reminds of that colonial image…..Dangle some plane tickets to NY, some wine, and an appearance on wall street and our land is sold off to the highest bidder- remember if we don’t return the $2billion we are slaves to the debtors.things that happen under the sun never change!
You keep remortgaging your country and you have your opening your teeth smiling smirking repugnantly
Debt is never nice, never a thing to rejoice of, I hate credit cards never wanted them, although companies have been thowing them at Nick and myself,
The ignoramous comments, will bring ramifications they will all you nonchalant people commenting here will prove like I have always said that the group of you whole lot are ignorant.
Zambians are nice people individually, but colelctively they are ignorant malevolent backwards people, and this has been proved time and time again!
I am doing my Phd so if you cant listen to me, you are quiet frankly ignorant too
Thanks
Iwe! I do not believe you are studying for a phd because you could have understood that as at February 2012 the percentage debt ratio of Euro 6.9 trillion on Sovereign bonds is attributed to major economies in Euro; Germany 23%, France 21%, Italy 25%, Spain 10%, Belgium 5%, Austria 3%, Finland 1%, Holland 5%, Greece 4%, Portugal 2%, Ireland 1%. This shows you that these economies have also relied on private funds through sovereign bonds.
Now know that Credit default swap spreads rose to new highs; even sovereigns with relatively strong public finances (including Austria, Finland, and the Netherlands) were hit by illiquid market conditions but the private investors have chosen to loan funds to Zambia because they envisage a less risk to their funds. Most countries borrow.
Financially intelligent people borrow money to make capital gain out of it before they pay back. financially daft people borrow money for consumption without knowing how and when they will pay back. This second type of thinking ruins people economically. I am sure the PF govt mean to do what the first type of people do. So, Mudhota you can’t condemn all borrowing because some borrowing of money. We borrowed to build TAZARA, what a wonderful investment. Mushota, use you education, your PHD etc to advice properly. Even the card can be used to make money for yourself before you pay back with interest. If you use credit card to by products and sell them at profit, thats good.
They should tell us how this money will be paid back. We deserve to know as Zambians as the burden is laid upon us. We have surely been “auctioned” as a country to the highest bidders at Wall Street for the benefit of the greedy “Bemba Mafia” bunch. Shame Ba PF and Ukwa. CNP
your level of irational thinking is what will certainly make us to star fighting each other at the expence of national development.
PF be wise on how you use this money. Instead of investing this money in roads and rail..lets use it to develop new government owned copper mines in northern province and the lower Zambezi. We can then apportion some of the profits from the copper sales to servicing the interest payments on the bond and some for infrastructure development. At the end of the day we will better off than if we put the money in roads, rails etc
So, why has Zambia borrowed this money? I don’t get it. The whole thing appears to be ill advised.
My worry is that we have the GBMs, Mahtanis, Nchitos, M’membes and others with “quicksilver” hands who will now pillage the US$750 million leaving the ordinary Zambian with a massive debt but nothing to show for it. DBZ loaned money to Zambian Airways which went broke but there is nothing that the Nchitos and M’membes can show for the “US$4 million DBZBOND”
PF is on course. The opposition should change their mindsets which are more focused on short term rebattals on petty issues. They have left the big picture and concentrated more on insults, belittling PF, exposing all govt shortcomings internationally with no patriotic commitment to mother Zambia, trusting foreign authorities and shooting at your own govt, tribal talks, ceasation, bantustans, claiming to be more popular than other parties when in fact they trail like a tail election after election. The mindsets must be tuned to supporting PF efforts in developing the country. There are principles that we all must observe, these must be redlines for all citizens. Wale up to reality , opposition parties!
Its called selling the people down the river.Slaves now licking white mans a….
Iwe Kilometre Sampa tefy bekata glass ya champagne ifyo!!
Th bank guy is toasting because even at just 1% commission the fee earned is $7 500 000 – and that is alot of money. What is Kilometres toasting – for getting inkongole? I am sure the banks could not believe their luck. This was an easy way for them to make a commission. Leading a government money does not say anything about what one thinks of a country – the government will always pay . Direct foreign investment is the one which communicates something.
but where are the so called foreign reserves left by MMD?Why can’t we use the same to invest rather getting a loan?
@Mushota
I do not believe you are studying for PHD because you could have understood that as at February 2012 the percentage debt ratio of Euro 6.9 trillion on Sovereign bonds is attributed to major economies in Euro; Germany 23%, France 21%, Italy 25%, Spain 10%, Belgium 5%, Austria 3%, Finland 1%, Holland 5%, Greece 4%, Portugal 2%, Ireland 1%. This shows you that these economies have also relied on private funds.
Now know that Credit default swap spreads rose to new highs; even sovereigns with relatively strong public finances (including Austria, Finland, and the Netherlands) were hit by illiquid market conditions but the private investors have chosen to loan funds to Zambia because they envisaged a less risk to their funds. This is the reason to be happy.
Still jobless after graduating from UNZA in 2009 with a bachelors degree of Agriculture, Ministers nephews have taken our jobs, someone with certificate in computer science from hone is an agricultural officer in Mumbwa no wonder you supply urea fertilizer to farmers before seed and D-compound, it pains me, no amount of money will make u develop without experts on the ground. the only change I feel is MMD to PF and UPND gone mad.
@Mushota
Also know that there has been an erosion of the foreign investor base in major economies due to several distinct factors:
** Rising credit risk and market volatility
** Rating downgrades and exclusion from benchmarks
** Increased haircuts on repo transactions
But the private investors have chosen to loan these funds to Zambia in the midst of challenges in Euro… when many other countries also require moderate funding costs to keep their public finances on an even keel… so you mean you can’t see that there is investor confidence…we cry that Sata will scare away investors but they are risking their money on Zambia and you think it is a bad deal…Let’s be serious!
@ Mushota,
You truly reflect that small component of really backward Zambians! What PhD are you doing? And who the hell is Nick?
N27 true! They white is is saying, thank you, this was a a great business opportunity for us! Sampa is not even making eye contact. You must learn to deal with these muszumgus you *****s. Just the picture tells a thousand words
My thots exactly.
The smirk look of Nigel speaks volumes and to a keen eye saay “I got u suckers” unlike timid sampa look which can be summed up in one word, orphan.
Mushota can you simply your english please i want to understand what your comment is all about. Don’t use PhD level english , use grade 12
“simply” …lol. you are an id.iot for sure
Use part of the money to stop load shedding.Again whatever investment is done,its mostly those in leadership 2 benefit.
Zambia has joined the league of Nations that use other peoples money to develop. What is required is prudence in utilization. Bravo PF.
Don’t really have a problem with this bond,..but the wine toasting, “party hats”, “confetti all over the place” is what i’m concerned about….Can they please urgently get to work….!?!
THere is a country bordering on crumbling that needs attention.
The white man is looking at him like “Whats this nigger all smiles about?”
This is a loan that could have been avoided, did we explore all the other alternatives ? Why did we not negotiate for Grants?
Come on lets be real that money is to just make sure PF officials enrich themselves before their era ends. And because of poor reporting/investigative journalism/following up Zambian citizens will also forget about what happened to this money too in 16years time and then everybody else will be wondering why Zambia is so poor
well there are many ways to create money but the true and trusted method is debt so more of that more money created out of nothing.
Nigel Cree’s look says it all LOL