海角大神

Zambia went to the international markets last week to raise $750 million in bonds and the overwhelming response turned the country's debut offering into sub-Saharan Africa's most successful bond launch. The result signaled strong confidence in the political and economic direction of a nation that even 20 years ago was considered one of Africa's worst basket cases.聽

Investor demand exceeded聽the initial offer聽by 15 times, according to Zambia's Ministry of Finance. Zambia initially hoped to raise $500 million, but increased the over in response to strong demand. The 10 year bond carried a coupon聽鈥� or the interest rate Zambia will owe聽鈥撀爋f 5.375 percent. That's a more favorable rate than Spain could currently get, with their 10 year notes yielding roughly 5.7 percent.聽

鈥淭his is not only the largest order book for sub-Saharan Africa, but also at 5.375 percent is the lowest coupon, meaning the most favorable price,鈥� said Zambia鈥檚 finance minister Alexander Chikwanda at a press conference in Lusaka last Friday.

Zambia has now established a history of holding peaceful, credible and transparent elections. In 2011, long time opposition and populist leader of the Patriotic Front Michael Sata won presidential elections, unseating a government that had been in power for 20 years.

鈥淚nvestment thrives in a stable and peaceful political environment. That investors oversubscribed to Zambia鈥檚 bond is a clear proof of how much they appreciate the stability of Zambia鈥檚 political climate.鈥� Dr. Lubinda Habazoka of the School Of Business at Copperbelt University told the Monitor

The country also boasts rising revenues and a low debt load. Having generated a total of $5 billion in copper mining investment over the last 10 years, Zambia's annual copper production is projected to reach 1.5 million tonnes by 2016. This coupled with an international debt standing at $1.5 billion, also led to investors scrambling for Zambia鈥檚 bond, according to Dr. Habazoka.

鈥淢ore investors are willing to put their money in the Zambian economy because the projections and current levels of Foreign Direct Investment are very attractive.鈥� noted Dr. Habazoka 鈥淏esides, Zambia has managed and maintained low levels of internal and external debts since reaching the Highly Indebted Poor Country鈥檚 (HIPC) completion point in 2005, and has demonstrated good fiscal discipline, a key factor in the oversubscription of Zambia鈥檚 bond.鈥�

Meanwhile chairman of the Zambia Public Sector Development Association (PSDA) Yusuf Dodia told The Monitor that the rating of Zambia as a B+ investment destination by both Fitch and Standard & Poor鈥檚 was an important sign of financial health.

鈥淟ook at Fitch and Standard and Poor鈥檚 ratings of Zambia due to the sustained Gross Domestic Product (growth) of 6 percent in the last 10 years which has resulted in the reduction of the inflation rate to 6 percent from 30 percent in the year 2000," said Dodia 鈥淚nvestors do not want to invest in stagnant economies. So the B+ ratings were definitely a plus for Zambia and it contributed to the oversubscription to the bond.鈥�

According to Mr. Chikwanda, more than 400 investors took part in the issue with the United States of America leading the subscription at 56 percent while Europe got 40 percent. Asia got three percent and others got 1 percent.

As to the type of investors who took part, the finance mister said, 鈥淒ifferent kinds of investors participated in the bond. Asset and fund managers took 80 percent, banks six, pension funds six and others eight.鈥�

Deutsche Bank and Barclays are the lead managers and joint runners for Zambia鈥檚 bond.

The funds would help eliminate power black outs, traffic jams, railway transportation challenges and speed up construction of other infrastructure according to Zambia鈥檚 finance deputy minister Miles Sampa.

And in a press statement by the president鈥檚 special assistant for press and public relations George Chellah, Zambian President Michael Sata whose populist ideas and negative attitude towards Chinese investors had raised concern after he came in power urged foreign investors 鈥渢o not fear investing in Zambia if their investment is clean.鈥�

Sata also said, 鈥淭his happy outcome is credited to the people of Zambia who are the architects of unity peace and stability that our development prospects are anchored on.鈥�