Investors are loving Senegal’s $2.2 billion issued Eurobond as it attracts bids worth $10 billion

With the increasing demand for African countries debt, Senegal garnered almost $10 billion of bids for the issuance of over $2.2 billion of Eurobond, according to report.

Pleading anonymity, a source informed Bloomberg on Wednesday that the West African country plans to sell 1 billion euros ($1.2 billion) in debt and another $1 billion tranche. The euro notes has nine years, maturity on the average and is expected to yield 4.75 percent, while the dollar security has 29 years maturity on the average and yield 6.75 percent, the source added.

The Senegalese government had initially portioned the euro as 5.125 percent to 5.25 percent and 7.125 percent to 7.25 percent for the dollar tranche, the source pointed out.

As at the time the pricing was decided, Senegal had gathered up to $9.5 billion of orders; an after effect of the countries “good and improving credit”, Richard Segal, a senior analyst in London with Manulife Asset Management explained.

In the last year, Senegal attracted 9.3 billion in offers when it went to markets with a new issuance of Eurobonds, allowing managing banks to reduce the yield on the offer from the initial 6.5% to 6.25%.

Senegal’s debt sell comes after Egypt, Nigeria and Kenya sold a total of $8.5 billion of Eurobonds this year, bringing the continent’s total issuance so far in 2018 to $10.7 billion.

Though foreign exchange sovereign debt bonds are a relatively new development in most African economies, investors interest in African bonds has been on the rise in recent years as low return rates in Asian, European, and American lending markets make for riskier ventures.