Delegated Sovereignty: How the Governance of Eurobond Pricing Defines the Cost of Being a State
Recent sovereign Eurobond issuances from African states have demonstrated remarkable investor appetite. Order books routinely exceed initial targets by factors of three, four, sometimes five. The transactions close successfully. Capital flows arrive on schedule. Official announcements celebrate the depth of international confidence.
The coupons, however, tell a different story. Yields of eight percent, occasionally nine, persist even as demand surges. The pricing appears to reflect sustained caution rather than the enthusiasm evident in subscription levels.
This presents a governance puzzle worth examining. When investor demand substantially exceeds supply, what explains the persistence of elevated borrowing costs? The question matters because the answer reveals less about credit quality than about the institutional architecture that governs how sovereign risk is quantified and priced.
