Gabon Hires Citigroup for Investor Meetings as Bond Losses Mount

Vinícius Andrade, Ellie Smith and Esteban Duarte, Bloomberg News

The logo of Citigroup Inc. at the entrance to the bank's office in Paris, France, on Monday, Feb. 27, 2023. Citigroup is building a new trading floor in Paris as the Wall Street giant prepares to nearly double its staff in the French city. Photographer Benjamin Girette/Bloomberg Photographer: Benjamin Girette/Bloomberg , Bloomberg

(Bloomberg) -- Gabon is meeting with fixed-income investors this week as a rout fueled by fiscal and political risks rocks the central African nation’s bond market.

The junta-led country is holding meetings in New York Thursday to provide a credit update, with Citigroup Inc. coordinating logistics, according to people familiar with the matter, who asked not to be identified because they’re not authorized to speak about it.

Prime Minister Raymond Ndong Sima said by phone that the meetings will be used to market Gabon as a safe place of investment in an economically and politically unstable region. A spokesperson for the Ministry of Economy and Participations confirmed Gabon had hired Citigroup to organize the meetings.

Gabon’s dollar notes have handed investors a 5.7% loss this quarter, ranking as one of the worst-performing names across emerging markets over the period, according to data compiled by Bloomberg. Yields on the OPEC member’s February 2031 notes reached the highest in more than five months on Friday.

Tellimer Ltd. downgraded Gabon’s 2031 bonds to a sell on May 2.

Recommendations from a national consultation to suspend up to 200 political parties could undermine an earlier timeline to return the country to democracy, Jamie Fallon, a London-based analyst at Tellimer Ltd., wrote in a note to clients. This could damage international support, making bilateral and multilateral funding a more distant prospect, Fallon said.

Following one month of talks, Gabon’s political parties, civil society, labor unions, religious heads and minority groups proposed to the military leadership to suspend all legally recognized political parties, pending the establishment of new rules governing their functioning, Agence France-Presse reported April 30. The current time table sets elections for August 2025, following the 2023 coup.

There’s greater default risk on Gabon’s 2025 eurobonds “amid fiscal underperformance and a narrowing window for International Monetary Fund funding,” said Fallon.

(Updates with comment from prime minister in third paragraph)