Bdeac 2024 bond issue: more than 500 securities traded upon listing on the stock exchange
The Central African States Development Bank (BDEAC) has recently made headlines with its successful multi-tranche bond issue, marking a significant milestone in the financial landscape of the CEMAC region. The bond, which began trading on August 7, 2024, at the Central African Stock Exchange (Bvmac) in Douala, represents a forward-thinking approach to funding development projects within the member states.
On August 7, the Central African States Development Bank (Bdeac) placed new bonds on the sub-regional stock market, approximately three months after the closing of the said loan, in April 2024. Thus, 5,476,971 securities called “BDEAC (6.20% -5.95% -4.70%) NET 2024” subscribed as part of this operation, were admitted to the “C” Bond compartment of the Central African Stock Exchange (Bvmac) for a total outstanding amount of 54.7 billion CFA francs. For Tranche A called “BDEAC 6.20% NET 2024-2031”, 2,361,587 bonds were listed; 1,538,685 bonds were listed for Tranche B called “BDEAC 5.95% NET 2024-2029” and 1,576,699 bonds for Tranche C called “BDEAC 4.70% NET 2024-2027”.
From the first trading session on August 7, 2024, 525 bonds were traded on the bond market. In detail, 275 Tranche B bonds were traded for 10,000 CFA francs, or an amount of 2.8 million CFA francs, including coupon; and 250 Tranche C bonds, traded at a unit price of 10,000 CFA francs, for a total of 2.5 million CFA francs including coupon. Calculator in hand, the total sum of these two transactions is estimated at 5.3 million CFA francs.
Let us recall that for the first day of listing, the introduction procedure is the “open price offer” with a reference price set at 100% or 10,000 CFA francs. As part of this operation, the capital will be repaid by maturity. For tranche A (7-year maturity), the amortization of 1/5 of the capital will be done each year after 2 years of deferral; For Tranche B (5-year maturity), the amortization of 1/3 of the capital will be done each year after 2 years of deferral and for tranche C (3-year maturity), the amortization of the capital will be done after 2 years of deferral. To ensure the full repayment of the envelope raised on the financial market, an escrow account called “Escrow Account-Amortization of the Bdeac Bond Loan (6.20%-5.95%-4.70%) Net 2024-2031” will be opened in the books of the Beac. Each month, it will automatically debit an amount from the Treasury account and transfer it to the amortization account. At each repayment deadline, the Central Bank will debit the amortization account to credit the account(s) of the investors who have subscribed to this loan.
The “BDEAC (6.20%, 5.95%, 4.70%) Net 2024-2031” bond issue is structured in multiple tranches, catering to different investor preferences and maturity profiles. This innovative structure allows for a diversified investment base and reflects the bank’s adaptability to market needs. The funds raised are earmarked for the implementation of the “Azobe Strategic Plan 2023-2027,” which aims to intensify BDEAC’s interventions in financing development projects within the CEMAC zone.
The success of this bond issue is a testament to the robustness of the CEMAC financial market and the growing appetite for investment in the region. It also sets a precedent for future issuances, as the BDEAC plans to launch another CFA50 billion bond later in the year to complete the CFA100 billion envelope approved by the bank’s Board of Directors for FY2024.
The BDEAC’s strategic plan, “Azobe,” requires a total mobilization of CFA1,895 billion, with a significant portion expected to be raised through the financial and monetary markets of the region. This ambitious plan reflects the bank’s vision to be a modern institution that serves as the foundation for the economic development of the CEMAC region.
As the BDEAC continues to navigate the financial waters with its strategic initiatives, the successful bond issue serves as a harbinger of the potential for economic growth and integration in Central Africa. It is a clear indication that the region is ripe for investment and that the financial mechanisms are in place to support such endeavours.
The BDEAC 2024 bond issue is more than just a financial transaction; it is a symbol of hope and progress for the Central African states. It demonstrates the potential of collaborative efforts in achieving economic stability and growth. As more than 500 securities were traded upon listing, it is evident that the region is moving towards a brighter and more prosperous future.
