JP Morgan upgrades Afreximbank Bonds…citing improved value, strong fundamentals

investment bank JP Morgan Chase has upgraded its view on African Export-Import Bank (Afreximbank), moving its recommendation from underweight to overweight after recent market repricing made the securities more attractive relative to peers.

according to a report cited by reuters, the shift reflects growing investor confidence in Afreximbank’s underlying financial strength, institutional structure, and its ability to navigate sovereign debt restructuring environments while maintaining strong shareholder and policy support.

afreximbank bonds experienced a sell-off in january after fitch ratings revised its assessment of the bank’s credit profile, raising questions about how development finance institutions are treated in certain sovereign restructuring cases. the market reaction was swift, creating pricing dislocations across Afreximbank’s outstanding bonds.

JP Morgan analysts said the repricing had significantly improved relative value, making Afreximbank bonds more compelling when compared with similar supranational and development finance issuers. according to reuters, JP Morgan noted that the recent sell-off “created more value in these bonds and made them attractive relative to benchmarks,” prompting the upgrade.

investor sentiment has also been supported by clarity around Afreximbank’s engagement with Ghana, where the bank reached a mutually agreed resolution on a US$750 million facility originally signed in 2022. both parties confirmed that the facility was resolved to their satisfaction, allowing continued cooperation in support of Ghana’s development agenda.

market participants have also drawn parallels with zambia, where sovereign debt restructuring discussions remain ongoing. analysts suggested that the Ghana outcome provides a useful reference point for how African development finance institutions may be treated in future restructuring scenarios.

JP Morgan indicated that Afreximbank has the flexibility to adjust its lending structures and risk management approaches to limit exposure to similar situations going forward, while continuing to support member states through trade and development finance.

at the same time, analysts expect African sovereign shareholders to remain supportive of Afreximbank, given its strategic mandate, embedded legal protections, and its role in advancing intra-African trade under the African Continental Free Trade Area.

with Moody’s maintaining its investment-grade assessment of Afreximbank, the bank’s bonds remain eligible for inclusion in major investment-grade bond indices, including those tracked by JP Morgan. this continued index inclusion is critical for institutional demand, particularly among funds with strict mandate requirements.

JP Morgan analysts noted that as long as Afreximbank maintains its current standing with Moody’s, demand from benchmark-driven investors is expected to remain stable.

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