The International Finance Corporation, the private sector arm of the World Bank Group, issued a CFA franc-denominated bond last month to encourage the opening of the West African bond markets. “IFC expects to follow this bond issue with structured products developed in partnership with local financial institutions,” says Nina Shapiro, IFC vice president and treasurer. The issue is IFC’s first local currency bond offering in sub-Saharan Africa.
The $44.6 million equivalent five-year bond, which has a 4.75% interest rate, was placed with institutional investors in the eight member countries of the West African Economic and Monetary Union. Its members are Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
BICI Bourse, part of BNP Paribas, was the lead manager for the bond. All of the proceeds will be reinvested in the zone and will help to finance under-served sectors, such as small businesses and environmental improvement projects. By issuing in domestic capital markets, IFC says it is providing a model for future issuers and supporting long-term local currency financing for local companies.
Local banks that helped distribute the bond included Banque de Développement du Mali, BIAO, Bank of Africa, Banque Sénégalo-Tunisienne, Compagnie Banquaire de l’Afrique Occidentale and Ecobank.