Gabon has raised $920 million through a seven-year Eurobond, exceeding its initial target by 22.7% as strong investor demand allowed the country to secure more funding despite continuing to face high borrowing costs on international capital markets.
The government priced the bond on July 30 at a principal amount equivalent to about CFA524 billion, up from the $750 million initially sought.
According to a government statement, the transaction is expected to settle around August 5. The notes will mature in 2033 and carry a 9.375% annual coupon, with a three-year grace period during which Gabon will pay interest before beginning principal repayments.
The government said the issuance was “significantly oversubscribed.” Market data indicates investor orders exceeded $1 billion, allowing Libreville to increase the deal size by $170 million.
Better terms than the 2025 issuance
The new Eurobond improves on several features of Gabon’s previous international bond sale. In February 2025, the country raised $570 million through a bond maturing in 2029 with a 9.5% coupon. The latest transaction increases the amount borrowed by 61.4%, extends the maturity from roughly four years to seven years, and lowers the coupon by 12.5 basis points.
However, the coupon alone does not determine the overall cost of borrowing. The effective financing cost also depends on the bond’s issue price, investor yield, and associated fees. The 2025 Eurobond, despite its 9.5% coupon, was issued below par, resulting in an initial yield of 12.7%. Until the issue price and yield of the new bond are disclosed, the full extent of the financing improvement cannot be assessed.
The use of proceeds also differs. A substantial portion of the 2025 issuance was used to refinance a Eurobond maturing in June that year. No such liability management operation has been announced for the 2026 transaction, meaning the Treasury is expected to receive more net new financing after issuance costs.
Larger than Cameroon’s issuance, but more expensive
Gabon raised 22.7% more than the $750 million Eurobond Cameroon issued on January 30, 2026. Both transactions have seven-year maturities.
Cameroon secured a two-year grace period and used a dollar-to-euro swap that converts dollar-denominated debt service into euros, reducing foreign exchange risk because the CFA franc is pegged to the euro. According to Cameroon’s Ministry of Finance, that structure lowered the effective financing cost to 7.79% in euro terms.
That remains below Gabon’s 9.375% coupon, although a direct comparison will only be possible once the effective yield on Gabon’s new bond is published. For Libreville, the main improvements lie in the larger amount raised, the longer maturity compared with last year’s issue, and the absence of a simultaneous Eurobond buyback.
The transaction comes one month after Moody’s affirmed Gabon’s sovereign rating at Caa2 while revising the outlook from stable to negative, citing high financing needs, constrained market access, and the risk of further distressed debt operations.
Financing investments and clearing arrears
The government said the net proceeds will finance public investment projects and repay outstanding external commercial and multilateral obligations. According to the offering documentation, the arrears do not include unpaid bills owed to domestic companies.
The issuance remains below the CFA857.9 billion (about $1.5 billion) external borrowing ceiling authorized under the revised 2026 finance law enacted on July 17.
The $920 million issuance represents about 61% of that limit, leaving theoretical borrowing capacity of roughly $580 million, although no additional Eurobond sale has been announced. The revised budget law had also contemplated a 10-year maturity, compared with the seven-year tenor ultimately secured, without any public explanation for the change.
The transaction followed the publication of a preliminary prospectus on July 27 and was led by Finance Minister Thierry Minko.
The government said the strong investor demand reflected renewed confidence in Gabon’s credit profile and reform agenda.
That sentiment could be reinforced if Gabon reaches a financing agreement with the International Monetary Fund. Technical discussions are ongoing, with an IMF mission expected in Libreville in September and the government aiming to conclude an economic and financial program before the end of 2026.
Baudouin Enama
