$920M Gabon Eurobond Exceeds Target, Offers Improved Terms for Developing Nation

Gabon has successfully issued a seven-year Eurobond worth $920 million, exceeding its initial target of $750 million. The bond was priced with a 9.375% annual coupon and will mature in 2033, offering a three-year grace period on principal payments.

The government plans to use the proceeds from the bond for public investment and to clear external commercial and multilateral obligations. This move marks Gabon's return to international markets after a $570 million bond sale in February 2025, which carried a 9.5% coupon and matured in 2029.

Moody’s rates Gabon Caa2 with a negative outlook, citing funding needs, limited financing options, and debt risks. The country has also requested support from the International Monetary Fund (IMF) for its finances and reform plans.

The Eurobond issue gives Gabon more money, a longer repayment period, and a lower coupon compared to the 2025 bond. However, it also adds dollar exposure against the CFA franc, creating currency risk unless the debt is hedged or dollar income can cover payments.