A world-class repo facility for African Eurobonds

Making financial markets work for Africa

Read S&P Dow Jones Indices “Digging into African Debt with the iBoxx LSF USD African Sovereigns”

Who we are

The Liquidity and Sustainability Facility “LSF”, was designed with the support of the United Nations Economic Commission for Africa and Afreximbank with the overarching goal of supporting the liquidity of African Sovereigns Eurobonds in order to contribute to the debt sustainability of African nations. Its establishment was announced at the COP26 in 2021 .

Our objectives

Supporting the liquidity of African Sovereigns Eurobonds

African governments have historically faced high costs of borrowing. Compression of liquidity premia and improved sovereign access to Eurobond markets has the potential to save African nations an estimated USD 11 billion on borrowing costs over the next five years. Improved liquidity may have the effect of compressing yields by strengthening the demand and consequently, the price of eligible sovereign bonds. By supporting these objectives, the LSF seeks to support the debt sustainability of African nations.

Incentivising green and SDG-related investments

The LSF aims to support the green and sustainable recovery of African countries. Currently, the share of sustainability-linked bonds issued in Africa and the Middle East accounts for less than 1 per cent of the global total amount, indicating that there is a large potential for growth, and opportunities for SDG investors. The LSF utilises its resources to engage with investors with a special focus on green and SDG linked investments, thus seeking to promote sustainability-linked investments in Africa.

What we do

The LSF implements its strategy through 3 channels:

  • Liquidity provision for institutional investors on large transactions
  • GC basket
  • Market index

How we do it

The Repo market is an essential part of the good functioning of global financial markets and the path to affordable government debt. The LSF seeks to help the African Sovereign Eurobonds repo market reach the same level of maturity as in developed countries.

Watch the LSF animated movie

Our counterparties

The LSF engages with counterparties established in recognized jurisdictions and of the highest quality and reputation such as insurance companies, banks, pension funds, asset management firms, and public and private investment funds.  

Our risk management

The LSF deals with selected counterparties of high credit quality and with full recourse. Risk management policies, including margining, are implemented intra-day by our collateral agent. The LSF transacts using industry standard documentation framework for repos.

The Liquidity and Sustainability Facility (LSF) DAC is a designated activity company with limited liability duly incorporated Under the laws of Ireland on 20 october 2021. The issued share capital of the LSF is held on trust for charitable purposes.

The LSF acts on own account and not as a market maker and fjurthermore will not operate as a deposit taker, a fund or as a provider of investment services. It is not regulated, licensed and / or authorised as a Financial service provider in Ireland (where it is incorporated) or elsewhere.

Newsroom

Read the LSF press releases and related articles.

About The Liquidity and Sustainability Facility 
The LSF was designed with the support of the United Nations Economic Commission for Africa and Afreximbank with the dual objective of supporting the liquidity of African Sovereigns Eurobonds and incentivizing SDG-related investments such as SDG and green bonds on the African continent.


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