World Bank to African states: Stop issuing Eurobonds to buy back maturing debt

BDEurobond

Several African countries have issued Eurobonds to refinance maturing Eurobonds to ease refinancing pressures in the short-term.

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The World Bank (WB) has warned African states against issuing Eurobonds to refinance maturing bonds and commercial loans instead of investing in infrastructure projects.

The Bank says the new loans acquired at a relatively higher cost could exacerbate the risk of default and hinder stability of African economies as increased global risks and tighter financial conditions raise borrowing costs and reinforce market fragmentation.