JOHANNESBURG, April 9 (Reuters) - The Democratic Republic of Congo raised $1.25 billion in its maiden international bond sale on Thursday as the resource-rich nation took advantage of its key role in the global critical minerals market and closer ties with the United States.
The Central African country sold $600 million of a bond maturing in 2032 at a yield of 8.75% and $650 million of a 2037 bond at 9.50%, according to one of the banks on the deal. Final orders exceeded $2 billion and $2.8 billion, respectively, excluding joint lead managers.
Finance Minister Doudou Fwamba Likunde Libotayi said the bond sale was a significant milestone for the nation and an important step in diversifying its financing.
"The success of the transaction also reflects ... recognition of the progress we have made in our ongoing efforts to strengthen macroeconomic stability, improve public finance management, and advance structural reforms that support sustainable and inclusive growth," he told Reuters.
Congo has previously said the issue would be part of a broader $1.5 billion Eurobond program announced earlier this year. Proceeds are earmarked for priority, growth-enhancing projects across infrastructure, energy and social sectors, the finance minister said.
"Our ambition is to become a regular sovereign issuer," Libotayi said.
Both bonds sold on Thursday are senior unsecured and amortizing, or paid back over a number of years. The large order books helped the government tighten the pricing, which had earlier been indicated around 9.125% for the five-year and 10% for the 10-year bond.
The sale comes as global interest in Congo's vast reserves of minerals essential for the energy transition grows, with the U.S. and allies seeking to diversify supply chains away from China.
A "positive" credit rating outlook from S&P Global Ratings in January added to the momentum, with the agency citing robust economic growth prospects and improvements in foreign reserves and tax collection.
Bond sales across emerging markets soared to a record high at the start of the year before grinding to a halt when the Iran war sharply lifted energy prices and stoked fears of rising inflation and higher global borrowing costs.
However, conditions in international capital markets improved earlier this week after Washington agreed to a provisional two-week ceasefire with Tehran.
"We are strengthening our capacity to manage external shocks, including through measures to enhance energy security and maintain macroeconomic stability," Libotayi said.
Congo, a cobalt and copper producer, still faces persistent domestic risks.
In its base offering circular published on Wednesday, the DRC underscored vulnerabilities tied to its heavy reliance on mining exports, ongoing instability in its conflict-ridden eastern regions, and dependence on concessional financing, which still accounts for 97% of its external debt.
"Concessional financing continues to play a central role in our funding mix, given its cost-effectiveness and alignment with our debt sustainability objectives," said Libotayi.
Sporadic fighting with Rwanda-backed rebels, volatile commodity prices and infrastructure bottlenecks could also weigh on fiscal resilience, while dependence on major trade partners like China introduces economic concentration risks.
(Reporting by Colleen Goko in Johannesburg; Editing by Hugh Lawson, Kirsten Donovan and Matthew Lewis)
By Colleen Goko
