Zambia paid $38.4 million to banks to borrow third Eurobond – Bloomberg

International news agency Bloomberg reports that Zambia’s transaction costs surged almost forty-fold for its third Eurobond issue, managed by Barclays Plc and Deutsche Bank AG, the prospectus for the deal shows.

Zambia paid $38.4 million in management fees, underwriting commissions and other unspecified expenses for the $1.25 billion sale, the document shows. That compares with transaction costs of $1.4 million for its first offering in 2012.

Yields on the latest Eurobond were 9.38 percent at sale, making it the most expensive dollar debt issuance for an African government. They climbed to 9.67 percent on Tuesday. Zambia, Africa’s second-biggest copper producer, had to pay up as prices for the metal slid to six-year lows and its fiscal deficit eclipsed government’s targets.

The shortfall will rise to 6.9 percent this year from a budgeted target of 4.6 percent, according to the prospectus.

 

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