Benin plans seven-year sukuk offering, potential bond tap to finance budget

JOHANNESBURG, Jan 13 (Reuters) - Benin is planning to issue a benchmark-sized seven-year sukuk and potentially tap its 2038 and 2041 dollar-denominated amortizing notes to help finance its budget, a presentation seen by Reuters on Tuesday showed.

The planned tap targets the West African country's 7.960% notes maturing in 2038 and 8.375% notes maturing in 2041, with respective weighted average lives of 11.1 years and 14.0 years.

The 2038 notes hold ratings of B1 (positive) from Moody's and BB- from Fitch, while the 2041 securities are rated BB by S&P and B+ by Fitch.

The sukuk, expected to be dollar-denominated and fixed rate, is expected to receive ratings of B1 from Moody's and BB- from S&P. Both the bond tap and the sukuk will be issued under the 144A/RegS format, with proceeds allocated for general budgetary purposes under Benin's finance laws.

Citigroup, Emirates NBD Capital, HSBC and JPMorgan will act as joint lead managers for the bond tap. In addition, Rothschild & Co will serve as a financial adviser.

The sukuk offering will see Citigroup, Emirates NBD Capital, HSBC and JPMorgan serving as global coordinators, while Arqaam Capital, Citigroup, Emirates NBD Bank, HSBC and JPMorgan will jointly book-run the deal.

Structuring responsibilities are being handled by HSBC and Emirates NBD Capital, with advisory support from Galite Partners.

Benin, a member of the West African Economic and Monetary Union, is rated B1 (positive) by Moody's, BB- (stable) by S&P, and B+ (stable) by Fitch. The country's next ratings review is scheduled for January 16.

Benin issued a $500 million, 16-year Eurobond in January 2025 and refinanced part of its 2032 Eurobond with proceeds from a 500-million-euro loan partially funded by the World Bank .