BOAD Raises US$153 Million in Tokyo Without a Guarantee
WEST AFRICA · FINANCE
Key Facts
—The deal: BOAD priced ¥25 billion, about US$153 million according to Ecofin Agency, in two tranches on 24 July. It is the bank’s first Samurai bond.
—The terms: ¥21.7 billion over three years at a 3.72% coupon, and ¥3.3 billion over five years at 4.29%.
—The novelty: Financial Afrik describes it as the first public sustainable Samurai issue by a multilateral development bank, and it carries no external guarantee.
—The size: Against BOAD’s new five-year funding plan of CFA6.5 trillion, around US$11.3 billion, the deal is roughly 1.4% of the programme. The purpose was access rather than volume.
—The rating that mattered: Japan Credit Rating Agency assigned BOAD an A, two notches above Moody’s Baa1, and many Japanese institutions rely on domestic ratings to decide what they may buy.
—The price of entry: On the five-year tranche BOAD paid 2.25 percentage points over the Japanese benchmark. Crédit Agricole paid 0.58 of a point for a five-year Samurai in May.
—The currency problem: BOAD lends in CFA francs and holds no yen assets, so the exposure has to be hedged at an additional cost.
The BOAD Samurai bond is small and expensive, and that is not the point. West Africa’s development bank has raised about US$153 million in Tokyo on its own credit, with no Japanese guarantee behind it, the first time a West African multilateral has managed that in a public deal.
What the BOAD Samurai bond sold
BOAD, the development bank of the eight-member West African Economic and Monetary Union, priced ¥25 billion on 24 July across two tranches. Ecofin Agency put the dollar equivalent at about US$153 million, while Financial Afrik reported a figure closer to US$170 million.
The larger tranche, ¥21.7 billion, runs three years at a 3.72% annual coupon. The smaller, ¥3.3 billion, runs five years at 4.29%.
Set against BOAD’s recently launched five-year financing plan of CFA6.5 trillion, around US$11.3 billion, the raise is about 1.4% of the programme. The bank was buying a foothold, not funding a pipeline of projects.
Why unguaranteed is the whole story
African borrowers have issued Samurai bonds before, but usually with someone else’s credit attached. Côte d’Ivoire became the first sub-Saharan sovereign in the market in July 2025 with ¥50 billion over ten years at 2.3%, guaranteed by the Japan Bank for International Cooperation and privately placed.
Kenya followed in August 2025 with ¥25 billion backed by Japanese public insurance, and Egypt raised ¥80 billion earlier this month. Afreximbank is the exception: its ¥81.3 billion issue in November 2024 was the first Samurai by an African multilateral and the first by an African issuer without external support since the 2008 crisis.
BOAD’s deal is both public and unguaranteed. Japanese investors bought West African development-bank credit, not a Japanese wrapper around it.
The Japanese rating that opened the door
The bonds carry two ratings: A from Japan Credit Rating Agency and Baa1 from Moody’s, with the Japanese assessment two notches higher. That difference is not cosmetic.
Japanese regional banks and life insurers lean heavily on domestic agencies when deciding what they are permitted to hold. A JCR rating can widen the buyer list regardless of what the international agencies say.
BOAD received its first JCR rating on 14 May, at the Africa CEO Forum in Kigali. Moody’s then reaffirmed Baa1 on 23 July, the day before pricing.
That review supplied the sales pitch with its numbers: capital adequacy up from 21.5% in 2024 to 23.8% in 2025, usable equity 73% higher since the 2022 capital increase, and non-performing loans at 2.1% of the book.
Why now: Japan stopped being cheap
Japan is no longer a low-yield market, and that is precisely why the window opened. The ten-year Japanese government bond yield reached 2.901% in mid-July, its highest since 1996, after the Bank of Japan lifted its policy rate to 1% in June.
The yen has stayed near its weakest level in almost four decades, around ¥163.7 to the dollar. Japanese investors sold close to US$30 billion of US government debt in the first quarter of 2026 alone.
That money is looking for yen assets that pay. A 3.72% three-year coupon from a Baa1-rated multilateral fits the requirement, and the Samurai market is having its busiest run since 2015.
BOAD had prepared the ground for nearly a year. It held a first non-deal roadshow after the Tokyo International Conference on African Development in August 2025, a second round of meetings in June, and an investor call on 14 July.
What the access cost
The pricing shows the premium West African borrowers still pay. On the five-year tranche BOAD paid a spread of 2.25 percentage points over the Japanese benchmark yield, against 0.58 of a point for Crédit Agricole on a comparable five-year Samurai in May.
There is a second cost that never appears in the coupon. BOAD lends primarily in CFA francs and, as its president Serge Ekué noted six weeks before the deal, holds no yen-denominated assets, so the exposure has to be hedged.
Hedging a yen liability back into a currency pegged to the euro is not free. The all-in cost of this money is higher than 3.72%.
What it changes for the CFA zone
The significance is the precedent. A regional development bank has shown it can be bought by Japanese institutional investors on its own name, which lowers the bar for the next West African issuer to try.
It also widens a funding base that has leaned on euro-denominated markets and the region’s own bond market. Diversification matters more when politics and security in the Sahel keep sovereign spreads volatile.
Moody’s made the same point in its own register. It acknowledged the region’s political and security risks and concluded that BOAD’s capital position and shareholder support offset them.
Frequently Asked Questions
What is a Samurai bond?
A Samurai bond is a yen-denominated bond issued in Japan by a foreign borrower, typically listed on the Tokyo Stock Exchange. African institutions have made little use of the market until recently.
How much did BOAD raise?
BOAD priced ¥25 billion on 24 July 2026, about US$153 million according to Ecofin Agency. It came in two tranches, ¥21.7 billion over three years and ¥3.3 billion over five.
Why does it matter that the bond was unguaranteed?
Most African Samurai issues have carried Japanese guarantees or insurance, so investors were taking Japanese rather than African credit risk. BOAD’s public deal was bought on the bank’s own name.
What ratings does BOAD hold?
BOAD carries an A rating from Japan Credit Rating Agency and Baa1 from Moody’s, two notches lower. Moody’s reaffirmed Baa1 on 23 July, the day before pricing.
Did BOAD pay more than other borrowers?
Yes. On the five-year tranche it paid a spread of 2.25 percentage points over the Japanese benchmark, against 0.58 of a point for Crédit Agricole on a comparable May issue.
Connected Coverage
The deal widens a funding base still shaped by the region’s own monetary policy, set by the BCEAO, and follows the path opened by Afreximbank in Tokyo. Who lends to West Africa, and on whose terms, is the question behind Africa: The New Scramble.
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