The early redemption operation of half of the Eurobond 2025 of the Gabonese Republic, decided and announced on October 21, 2024 by the President of the Transition, President of the Republic, Head of State, Brigadier General Brice Clotaire OLIGUI NGUEMA, was launched on the international financial markets on November 7, 2024 and closed on November 14, 2024. This operation involved a maximum amount in principal of 290 million Dollars (180 billion CFA francs), for an outstanding principal of 605 million Dollars (376 billion CFA francs) and whose maturity was set for June 16, 2025.
The repurchase objective of 290 million dollars (180 billion CFA francs) was fully achieved, with the participation of more than 260 international investors, for an amount of 442 million US dollars (275 billion CFA francs), or more than 156 %. The transaction was completed at a price of 99.25 cents on the dollar. The performance of this buyback operation is very appreciable compared to similar actions carried out since the start of 2024 by comparable countries.
Following this repurchase operation, the outstanding amount of the Eurobond 2025 of the Gabonese Republic will be reduced to 315 million Dollars.
This unprecedented operation which will leave a positive mark on the history of credit is the result of exemplary collaboration between the Administration and local banks. It is part of the proactive public debt management strategy of the Republic: the repurchase was financed by bond issues carried out on the sub-regional market through two domestic syndication operations, thus making it possible to convert part of the external debt to internal debt.
Since the announcement of the operation, the performance of the Republic’s other Eurobonds has improved significantly, with a reduction in yields of almost 60 basis points on average, reflecting the renewed confidence of international investors in a marked global context. by high volatility.
This innovative approach demonstrates the capacity of the Gabonese Republic and the Transition authorities to provide relevant and adapted responses to the challenges of active management of public debt. The very favorable reception of the operation by investors and international rating agencies allowed the Gabonese Republic to reposition its credit and confirm the credibility of Gabon’s medium-term financing strategy.
Source: Ministry of the Economy and Participations
2024-11-18 11:13:00
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**Interview with Dr. Sylvie Mbengue, Financial Analyst and Economic Advisor**
**Editor:** Thank you for joining us, Dr. Mbengue. The recent early redemption operation of half of the Gabonese Eurobond 2025 has garnered significant attention. Can you provide us with some context about this operation and its importance for Gabon’s economy?
**Dr. Mbengue:** Thank you for having me. This early redemption operation is indeed significant for Gabon. It involves the repurchase of $290 million of Eurobonds, which reflects a strategic move to manage national debt effectively. By reducing the outstanding amount from $605 million to $315 million, Gabon is taking steps to strengthen its financial position and improve investor confidence.
**Editor:** The operation saw participation from over 260 international investors, achieving an impressive 156% of the targeted amount. What factors do you think contributed to this strong investor interest?
**Dr. Mbengue:** Several factors played a role in this robust participation. Firstly, the pricing was attractive, closing at 99.25 cents on the dollar, which is appealing for investors. Additionally, Gabon has been actively working on improving its fiscal stability, and this buyback signals a commitment to sound financial management. The collaborative efforts within the administration have also boosted confidence among investors.
**Editor:** How do you expect this buyback operation to impact Gabon’s credit rating and future access to international financial markets?
**Dr. Mbengue:** Successfully executing this operation is likely to have a positive effect on Gabon’s credit rating. Reducing debt obligations can enhance fiscal sustainability, making Gabon a more attractive destination for foreign investment. Improved credit ratings often result in lower borrowing costs in the future, facilitating access to international markets.
**Editor:** Moving forward, what should Gabon focus on to maintain this momentum and ensure continued economic growth?
**Dr. Mbengue:** Gabon should prioritize several areas, including enhancing transparency in financial governance, diversifying its economy beyond oil, and investing in infrastructure and human capital. Moreover, continuous engagement with international investors to maintain trust and open channels for future investments is critical.
**Editor:** Thank you for your insights, Dr. Mbengue. Your expertise sheds light on the significance of this operation for Gabon’s economic landscape.
**Dr. Mbengue:** My pleasure. Thank you for having me.
