CAPITAL MARKET : Cameroon seek Rothschild & Co to settle foreign loan
Official sources report that President Paul Biya, has agreed to the international financial holding company Rothschild & Co to structure the country’s foreign currency loan. The operation requires the Public Treasury to mobilize 200 billion FCFA on the international capital market, through a private placement.
As part of its foreign currency loan provided for by the amending finance law of this month of June, Cameroon intends to use the intermediation services of Rothschild & Co. The President of the Republic has thus given the go ahead for Minister of Finance Louis Paul Motaze to begin negotiations in this direction with the international financial holding.
Instead of a eurobond, as in 2015 and 2021, the government opted for a syndicated loan from bankers and other financial institutions. Some sources claim that the negotiations relating to this financing had first been started with the African Import-export Bank (Afreximbank) and the American bank Citigroup.
In addition, this new loan was agreed with the International Monetary Fund (IMF), during the 4th review of the economic and financial program with Cameroon. The funds mobilized will make it possible to clear part of the outstanding domestic debt that the state should have paid to its service providers according to its 2022 budget forecasts.
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According to a financial analyst, Cameroon will have no difficulty finding this amount on an international market where there is an abundance of liquidity “But, he will have to pay the price. So we should not expect a 5.95% as two years ago with the eurobond”. The interest rate will therefore be the main issue of the operation and it is at this stage that the contribution of Rothschild & Co is expected to make the rating affordable.
Another reason given for the choice of this renowned international service provider, the friendly relationship of the head of State with the Rothschild family and more particularly the former Board Chair of the financial group, Benjamin de Rothschild, who died early last year.
It should be noted that Rothschild & Co is a financial holding listed on Euronext (the main stock exchange in the Eurozone) and controlled by the French and English branches of the Rothschild family. At the center of the financial markets for more than 200 years, the company offers advice on strategy and financing, mergers and acquisitions, as well as investment solutions to large companies, families and governments around the world. This operation, is provided for in the amending finance law currently being examined by the Senate.
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