London Stock Exchange welcomes the Republic of Cameroon
London Stock Exchange today welcomes the Republic of Cameroon issuing its EUR685m 5.950% notes due June 2032 to London Stock Exchange’s Main Market. This is an inaugural listing of Cameroon’s sovereign Eurobonds on London Stock Exchange.
The Republic of Cameroon is the powerhouse of the Economic and Monetary Community of Central Africa (“CEMAC”), representing 45% of its GDP as of 2020. CEMAC Member Countries share a single currency, the CFA Franc, which is pegged to the Euro.
On June 30, 2021, Cameroon successfully returned to international capital markets for the first time since 2015 with the pricing of an inaugural €685m EUR-denominated bond and achieved historically competitive terms leveraging an orderbook of over EUR 2.5bn. The transaction capitalized on the recent Staff Level Agreement reached by the Country with the IMF on a new Extended Credit Facility and Extended Fund Facility. The Republic of Cameroon managed to reposition its curve through this inaugural EUR-denominated bond issue, which was a key objective to ensure market access at favourable conditions in the future. The Country secured all-time low financing costs, following a tightening of 65bps from IPTs, with a final reoffer yield of 5.95% implying a negative new issue premium of (17.5)bps.
The new issue was coupled with the Country’s first ever liability management exercise targeting the existing $750m Eurobond maturing in 2025. A record participation rate of 79.42% was achieved, which represents the highest participation rate achieved year to date by a Sub-Saharan African Country for a liability management exercise. This allows to markedly reduce refinancing risks for the Country for the years to come.
Louis Paul Motaze, Minister of Finance of Cameroon, commented: “Cameroon is a fast-growing economy and the main target of the government is to bring the country to middle income status by 2035. In this context, we are engaging in a large transformation of our economy under our 2020-2030 National Development Strategy. This event is a chance to celebrate our renewed relation with capital markets after six years of absence. This transaction was based on a fairly demanding timeline and our partnership with the London Stock Exchange allowed us to have the best possible timing for the issuance”