Gabon raises $580m in Eurobond as investor demand nears $1bn

Gabon has raised $580 million from international investors through an eight year Eurobond, with demand approaching $1 billion, as the Central African oil producer seeks funding to meet its financing needs and manage pressure on public finances.

The bond carries a coupon of 9.375 percent, while the order book was nearly twice the amount raised, Gabon’s Finance Ministry said on Wednesday.

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The ministry said the bond’s risk premium was about 50 basis points lower than that of the country’s previous issuance in July, despite the longer maturity and rising United States interest rates. The lower premium suggests investors were willing to accept a smaller additional return for holding Gabonese debt compared with the earlier issue.

The transaction is Gabon’s first Eurobond sold through a public offering since 2021, giving the government renewed access to international capital markets.

Thierry Minko, the Finance Minister led the bond sale and is representing Gabon at the International Monetary Fund and World Bank annual meetings in Bangkok this week. His schedule includes bilateral meetings with financial institutions and investors.

The strong demand provides Gabon with fresh external financing, although the coupon of 9.375 percent also highlights the cost of borrowing on international markets. The longer repayment period means the government will have eight years before the bond matures, while interest payments will remain part of its debt obligations.

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Gabon’s ability to manage those obligations will depend on its public finances and capacity to meet future repayments. The latest sale offers the government another source of funding, but the cost of the debt remains an important consideration as it manages its financing requirements.