• Benin raised $500 million through its first international sovereign sukuk.

• The state also reopened its 2038 eurobond for $350 million.

• Total investor demand exceeded $7 billion.

Benin announced yesterday it had completed its first international sukuk issuance. The country became the first African sovereign to launch an international sukuk in 2026, according to an official government statement.

An inaugural sukuk that drew strong demand

The sukuk had a nominal value of $500 million and a maturity of seven years. It was initially marketed at an indicative yield of 6.875%. A full dollar-euro currency hedge later reduced the coupon to 4.92% in euros.

The sharia-compliant bond attracted strong investor interest. Orders exceeded $3.9 billion. Demand was supported in particular by investors from the Middle East.

Benin authorities said this was the first inaugural international sukuk issued by a sub-Saharan African country since South Africa in 2014.

Eurobond reopening and funding diversification

At the same time, the Beninese state reopened its Eurobond maturing in 2038. The reopening raised an additional $350 million. The bond carries a coupon of 6.19% in euros and is fully hedged against currency risk.

The dollar-denominated bond was first issued in February 2024. The initial amount was $750 million. The original coupon was set at 7.96%.

The government said the two transactions are part of its strategy to diversify funding sources. They also aim to expand the investor base. This includes Islamic finance markets and Gulf countries.

A market-backed deal despite volatility

Authorities said the success of the operation followed an investor roadshow launched in 2025. Meetings were held in Doha, Abu Dhabi, Dubai, and London. The process generated total demand of more than $7 billion. This represents oversubscription of more than eight times the amount issued.

The government said issuance conditions were below yields seen on the secondary market for Beninese debt. This was achieved despite high volatility in global financial markets. The transaction had been briefly postponed due to market tensions. It was relaunched earlier this week.

Several investors involved in other Beninese bond deals said the main concern was absorption capacity. The market had to take in a large volume of debt over a short period. Benin was preparing an inaugural sukuk and reopenings of existing Eurobonds. These operations were expected to reach $1 billion. They also came amid strong competition among African sovereign issuers.

The level of demand and the pricing achieved appear to have eased these concerns, at least for now.

The government said the funds raised will cover a significant share of financing needs set out in the 2026 budget law. They will also support efforts to optimize the structure of public debt.

Fiacre E. Kakpo