Light rail construction in Ethiopia’s capital Addis Ababa. The country’s debut dollar bond may help fund future infrastructure projects.
Ethiopia completed a $1 billion debut dollar bond sale on Thursday, capping off a record year for frontier market debt issuance.
The 10-year bond priced to yield 6.625% and raised $1 billion, according to one of the banks working on the deal. Investors said demand for the bond had reached about $2 billion.
The deal is another landmark sale for Africa, having seen a bumper $2 billion debut issue from Kenya in June—one of the largest ever first-time sales from the region.
“We’re running out of new names that can issue,” said Kevin Daly, a fund manager at Aberdeen Asset Management in London, adding that Ethiopia is the poorest country on a per-capita basis that has issued international bonds.
Mr. Daly said he bought some of the bonds.
The deal takes bond sales from frontier-market borrowers to about $40 billion this year—a record high, according to data provider Dealogic. Frontier-market countries have ramped up global debt sales this year to take advantage of low interest rates and investor demand for higher yielding debt.