Investors look to Sierra Leone’s first corporate bond

Sierra Leone has made history by recording its first local currency corporate bond issuance valued at approximately 1.4 million dollars. The milestone issuance marks a significant development in the country's capital market and paves the way for future growth and investment opportunities. Gbadebo Adenrele, the Managing Director of United Capital Investment Banking, played a pivotal role in advising on the transaction and shared insights into the impact of this landmark event. Adenrele highlighted the importance of this transaction for Sierra Leone, a country with a population of nearly 9 million people and a GDP of about 3.8 billion dollars. Prior to this corporate bond issuance, the local market in Sierra Leone mainly saw investment from banks supporting the government, with no previous corporate issuances taking place. The issuance by Lapo Sierra Leone, a microfinance institution focused on poverty alleviation, signifies a shift towards diversification and expansion of the capital market in the country. Adenrele noted that United Capital Investment Banking worked closely with Lapo Sierra Leone and other advisors to navigate the regulatory environment and secure approval from the Bank of Sierra Leone, the country's central bank. The successful completion of the issuance demonstrates the potential for growth and development in Sierra Leone's corporate market. Adenrele emphasized the significance of the issuance for local corporates in accessing capital and expanding their operations. He mentioned that prior to this issuance, corporates in Sierra Leone relied on internally generated funds and other sources for financing, highlighting the absence of a defined capital market in the country. The corporate bond issuance opens up new opportunities for corporates to raise capital and supports the development of a more structured and robust capital market ecosystem. In terms of investor interest, Adenrele mentioned that a diverse range of investors showed interest in the bond, including development finance institutions, banks, impact investors, and domestic banks. The involvement of various investor groups underscores the potential of the corporate bond issuance to attract capital from different sources and drive economic growth in Sierra Leone. Looking ahead, Adenrele shared his optimism about the potential for similar bond issuances in other West African countries, highlighting the interest from partners and stakeholders in replicating this model. He discussed the possibility of other sectors, such as manufacturing, energy, and infrastructure, harnessing the opportunity to raise capital through bond issuances, depending on their business case and growth prospects. The successful debut of the corporate bond in Sierra Leone sets a positive precedent for future investment activities in the region and underscores the potential for local companies to access capital markets for expansion and development.