Benin is preparing a new international bond operation that could raise around $1 billion, as the West African country looks to diversify its funding sources and return to global capital markets with a landmark debut sovereign sukuk.
According to information presented to investors, the planned transaction would be structured as a multi-tranche 144A/Reg S bond deal, combining conventional Eurobonds with a seven-year sukuk, marking Benin’s first use of Islamic finance at the sovereign level. The overall size of the operation could reach about $1 billion, depending on market conditions and investor demand.
The proposed issuance may include the reopening of Benin’s existing Eurobonds maturing in 2038 and 2041, alongside the new sukuk tranche. Investor presentations referenced a potential $750 million tranche due February 2038 with a coupon of around 7.96%, and a $500 million tranche maturing in January 2041 with a coupon near 8.375%, though final terms would be set at pricing.
If completed, the sukuk would be a milestone not only for Benin but also for sub-Saharan Africa, where sovereign sukuk issuance has been rare in recent years. Benin’s move reflects a broader effort by African governments to tap into Islamic finance pools, particularly investors in the Middle East and Asia, as global borrowing conditions remain tight.
The planned deal is being arranged by a syndicate of international banks, including Citi, Emirates NBD Capital, HSBC and JP Morgan, which are marketing the transaction to global institutional investors. Benin currently holds sovereign ratings of B1 from Moody’s, BB- from S&P and B+ from Fitch, with Fitch recently revising the outlook on the country’s foreign-currency rating to positive.
Benin last accessed international capital markets in January 2025, when it raised $500 million in a Eurobond transaction that was met with strong investor demand. The government has since maintained regular engagement with investors as it seeks to balance development financing needs with prudent debt management.
The proposed bond and sukuk issuance underscores Benin’s ambition to broaden its investor base, lengthen debt maturities and reinforce its presence in international markets, while positioning itself as one of the few sub-Saharan African sovereigns to embrace Islamic finance instruments.
