Zambia up for top finance award
Lusaka – The Europe Middle East and Africa (EMEA) Finance Magazine has nominated Zambia for its prestigious Best Sovereign Bond Issuance for 2012.
The awards ceremony will be in the UK on June 20.
EMEA is a leading emerging markets publication which focuses on the performance of capital markets in Europe, the Middle East and Africa.
Zambia successfully issued its debut US$750 million Eurobond last year to raise money for infrastructure development. Bids worth US$11 billion were received, indicating strong confidence in the country’s medium to long-term growth prospects.
The yield was 25 basis points tighter than Zambia’s initial 5.875 percent guidance. This meant that the bond was eligible for the JP Morgan EMBI Global index, increasing its appeal to major investors.
Zambia’s Secretary to the Treasury, Fredson Yamba, said nomination for the EMEA award was both an important indicator of the international community’s confidence in the country as well as an endorsement of the government’s economic policies.
“This is a confirmation that Zambia’s image is truly venerated by the international community,” he said.
“Although there are other good nominees from the worldwide financial markets community, we look forward to a positive outcome. That is why government will be sending a representative to the awards ceremony in London,” Yamba added.
Zambia has a B+ credit rating from both Fitch and Standard and Poor’s.
Proceeds from the Eurobond are being ploughed into railways, energy and roads.
However, there are concerns about the impact repayments on the 10-year bond will have on the Zambian government. Interest is pegged at 5.5 percent, meaning the government will have to pay out US$4.4m every year and this could erode capacity to service other local and foreign debts.
But Deputy Finance Minister Miles Sampa has said the country is more than capable of meeting its obligations.
“We would not have gone on the international capital market if we were not capable of paying the Eurobond,” he pointed out.