Cameroon actively preparing $ 1.3 billion issuance

The Government of Cameroon met with investors for the issuance of its first sovereign debt in foreign currency, for an amount of $ 1.3 billion, revealed official sources close to the deal.

The meeting was held on Thursday, November 5, 2015, in Paris.

The information remained discreet, although indications of an imminent start of the operation had been given, with moving to Yaounde (capital of Cameroon) Frédéric Oudéa, CEO of French Societe Generale Group, selected as chief arranger queue, with the accompaniment of Standard Chartered Bank Cameroon.

For the purposes of the meeting of investors, Cameroon moved with a large delegation which included the Minister of Finance, Alamine Ousmane Mey, his counterpart of Economy and Planning, and senior officials of the two ministries.

The challenge was to know what rate will be served to Cameroon. On September 23, 2015, President Biya authorized his Minister of the Economy to sign with the African Development Bank, an agreement against-compensation worth 500 million euros (FCFA 328 billion). It was an option that was supposed to mitigate country risk profile, which obtained confirmation notes B / B- by Standard & Poor's with a stable outlook.

But Cameroon arrived on an international capital market that has become very expensive for African Eurobonds. Angola has long hesitated before finally deciding to launch its Eurobond of $ 1.5 billion and Ghana, despite the partial guarantee obtained from the World Bank, has achieved a rate of 10.75% for a maturity of 10 years for its $ 1.5 billion Eurobond.

Moreover, during his recent working visit to Cameroon, the IMF drew the attention of the Cameroonian authorities on the increasing rate of indebtedness.

The Eurobond is part of a plan to mobilize a total of nearly FCFA 1,000 billion to finance a three-year emergency plan supposed to accelerate the country's economic growth. Yet, part of sovereign current program rather used to refinance a debt of $ 164 million owed by the National Refining Company, a consortium of banks which include the local subsidiary of Société Générale, Standard Chartered Bank Cameroon, Atlantic Bank (a subsidiary of the Moroccan Banque Centrale Populaire) and CBC Cameroon.

Finally, even if oil production is not very important in the GDP of Cameroon, it brings 52%, regarding its foreign exchange earnings and lower oil prices which will certainly impact on the current account of the country, according to an analysis published by Moody in September.

The seminar, which started today, would continue on the US West Coast, including Friday, November 6, 2015, in the city of Boston, New York on Monday and the delegation will end in London, UK on November 11.