A large number of companies issue bonds as a source of financing, giving them access to national and international capital markets. The outbreak of the COVID-19 pandemic brought the issue of new corporate bonds, particularly by issuers from emerging markets and developing countries, to an almost complete standstill.
As an anchor investor, DEG is now supporting its long-standing customer, the African communications infrastructure provider Helios Towers, in the successful issue of the second bond in its corporate history.
The funds raised by Helios Towers will serve to improve and stabilise the company’s current financing structure. The bond replaces an existing bond that was set to mature in 2022, among other things. The placement also gives the company more liquidity for future investments.
“The successful placement of US$750mn was one of the first issues on the international capital markets by a private-sector company from a developing country since the outbreak of the pandemic. This means that it has also helped to revive the international capital markets for issuers from emerging markets and developing countries”, commented Andreas Cremer, Head of Project Finance for Africa/Latin America at DEG.
Helios Towers has specialised in building, acquiring and operating telecommunications towers that are capable of accommodating and powering the needs of multiple tenants in Tanzania, Democratic Republic of Congo, Ghana, the Republic of Congo and South Africa. These tenants are typically large mobile network operators and other telecommunications providers who in turn provide wireless voice and data services to consumers and businesses. This allows mobile phone towers to be operated with greater levels of energy efficiency, while operating costs can be split among several tenants, promoting the construction of new masts in less developed regions, in particular.
The mobile communications market is a key driver of development and growth in Africa, as it facilitates trade across regional borders, for example. The market also makes financial transactions easier: mobile banking is allowing many people in African countries to open bank accounts for the very first time, opening up access to cashless payment transactions for them.
The expansion of communications infrastructure also has a positive social impact, for example on the healthcare sector. By way of example, it allows diagnoses to be made and shared more reliably, a particularly relevant aspect in light of the coronavirus pandemic.
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