Zambia’s costs for its third Eurobond issue soared compared with its debut sale in 2012, both managed by Barclays Plc and Deutsche Bank AG, the prospectus for the deal shows.
The southern African nation paid $4.14 million in fees and commissions for banks and lawyers, as well as costs associated with marketing the $1.25 billion sale, after taking account of the discounted price at which the notes were sold, according to data compiled by Bloomberg from the sale and prospectus documents. That compares with $1.4 million for its first offering in 2012, which was also managed by Barclays and Deutsche Bank.
This is the most expensive dollar debt issuance for an African government
The securities were sold at 97.257 of face value, a discount premium of $34.3 million, pushing total costs for the transaction to $38.4 million, the data show. The nation paid a discount premium of $14.6 million for its $750 million issue in 2012.
Yields on the latest Eurobond were 9.38 percent at sale, making it the most expensive dollar debt issuance for an African government. They climbed to 9.67 percent on Tuesday. Zambia, Africa’s second-biggest copper producer, had to pay up as prices for the metal slid to six-year lows and its fiscal deficit eclipsed government’s targets.
The shortfall will rise to 6.9 percent this year from a budgeted target of 4.6 percent, according to the prospectus.
Source :Bloomberg News