African banks brace for Eurobond refinancing

ABSA and Standard Bank are among 12 African banks with outstanding Eurobonds that Moody's says will likely be refinanced through a combination of capital markets sources, including newer long-term Euro and dollar-denominated bonds, lending market instruments the finance institutions’ own foreign currency liquidity.

- TAWANDA KAROMBO

Standard Bank issued $200 million (about R3.4 billion) worth of Eurobonds in March 2020 at a 2.875% coupon rate. The bonds mature in 2020 and are listed by Moody’s as outstanding.

Other banks with upcoming Eurobond maturities include Ecobank, the Mauritius Commercial Bank, and about eight Nigerian banks - among them Access Bank, Fidelity and First Bank of Nigeria.

“A cohort of African banks is facing upcoming Eurobond maturities, with a large portion of these coming due in the second half of 2025 or in 2026. While these banks represent a small subset of the banks we rate in Africa, this wall of Eurobond maturities is still large,” said Moody’s senior credit officer, Mik Kabeya.

Moody’s now expects that this group of African banks with Eurobonds maturing in the next 18 months will largely be “opportunistic in their choice of refinancing sources, using a combination of Eurobonds, lending markets or a temporary use of their own liquidity” instruments.