Impaxis Securities: Sonatel's XOF 100 billion bond 122% oversubscribed

Impaxis Securities recently closed the issuance of Sonatel's corporate bond worth 100 billion CFA Francs on the BRVM, the largest of its kind in the WAEMU region. The bond, listed at a 6.5 per cent annual coupon rate with a tenure of 7 years, was oversubscribed by an impressive 122%. Ababacar Diaw, CEO of Impaxis Securities, shed light on the successful book building process during a recent CNBC Africa interview. Diaw mentioned that the process involved a tender at the regional level, with different investment bankers vying for the opportunity. Impaxis Securities emerged as the sole Arranger and Bookrunner for the transaction, managing the process in collaboration with Sonatel. This selection was described as an honor by Diaw, showcasing the confidence placed in their expertise. The sentiments from investors were notably positive, considering the challenging context of the COVID-19 pandemic. The oversubscription and early closure of the bond issuance highlighted the confidence in Sonatel's financial stability and the appeal of the investment opportunity. The diversified base of investors, with a significant presence of international players, contributed to the success of the transaction. Noteworthy was the limited representation of commercial banks, indicating a broader interest from various investor categories. According to Diaw, the bond proceeds will be utilized to finance Sonatel's infrastructure investments in Senegal, bolstering its operations and network, including mobile money services and other business lines. Sonatel, operating in five key regions, aims to maintain its leading position in the telecom sector and enhance customer service offerings across its markets. The company's strategy for the year includes focusing on its core market in Senegal while leveraging its holdings in other countries to drive growth and innovation. As Sonatel charts its course for the future, the successful bond issuance sets a positive precedent for other companies considering financial market options amidst the pandemic. The transaction not only underlines the viability of debt financing through corporate bonds but also serves as a beacon for private firms exploring financing avenues. The positive reception from both local and international investors underscores the confidence in Sonatel's operations and the potential for regional financial markets to support corporate growth. Despite challenges posed by the current global environment, the Sonatel bond issuance stands as a testament to the resilience and adaptability of regional financial markets in supporting economic development and corporate financing.