Gabon experienced a significant drop in its dollar bonds following a military coup, marking the largest daily decline since the height of the COVID-19 pandemic. The coup occurred shortly after President Ali Bongo won a third term. The bond due for repayment in 2025 fell by as much as 14 cents, while two 2031 maturities declined by 7 cents. Concerns about potential sanctions complicating payment transactions and limited access to financing for African countries further exacerbated the situation. Investors will now reassess their interest in Gabon and the wider political landscape in the region. Additionally, shares in Gabon-exposed oil producers TotalEnergies Gabon and Maurel et Prom decreased by over 20% at one point. Gabon recently completed a “debt for nature” swap, issuing a new “blue bond” for ocean conservation, but the political and economic risks associated with such swaps were highlighted. The immediate risk for bondholders is currently low, as Gabon’s next bond interest payment is not due until November. The impact of the coup on other bond issuers in Sub-Saharan Africa is uncertain due to existing strains in the region.
Gabon dollar-denominated bonds slide after army says it seized power
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