She said international lawyers have teamed up with local experts to work on the final details of legal and other procedural requirements before floating of the Eurobond aimed at securing funds for long term infrastructure projects and investment.
“The preparation works will be completed by March as we planned before floating the Eurobond between April and May,” she said in an interview.
The plans were now on schedule after working on challenges in the area of procurement laws that had delayed acquiring services of international lawyers, she said. “A team of lawyers is finalising preparatory works to help us enter the market on the most acceptable terms,” she said in an interview.
The government would pick one or two among the three international sovereign rating agencies - Fitch, Standard and Poors and Moodys to provide credit rating for the country before issuing of the Eurobond.
She would not, however, say her projections for the score of the country but noted that some investors predict a somewhat similar score to Mozambique. Standard & Poors credit rating for Mozambique stands at B+.
Fitchs credit rating for Mozambique is B, according to information posted on the Trading Economics website.
In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of a country thus having a big impact on the country’s borrowing costs.
The Eurobond process in Tanzania was originally launched in 2008, but was postponed due to the global financial crisis and launched again in 2012 with the intention of issuing the Eurobond during the 2012/13 financial year to fund infrastructure projects that would spur economic growth and improve living standards.
Ghana became the first African beneficiary of debt relief to tap international capital markets, when it, in 2007, issued a $750 million 10-year Eurobond.
Since then, other countries such as Senegal, Nigeria, Zambia and Rwanda have followed suit. Nigeria has, since its debt-relief of 2004, twice raised money from Eurobonds; first in 2011 with a $500 million 10-year Eurobond and then in 2013 when it issued a $500 million 5-year bond at a yield of 5.375 per cent and a $500 million 10-year bond with a yield of 6.625 per cent.
Last year Kenya raised a record $2 billion Eurobond, the largest debut for an African country in the sovereign bond market, while Ivory Coast also raised $500 million.
Source: Daily News, reported by Henry Lyimo, from Dar es Salaam, Tanzania
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