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Mittwoch, 27. Juni 2012

Ivory Coast Eurobond hits record high on debt deal

Ivory Coast Eurobond hits record high on debt deal

Wed Jun 27, 2012 12:08pm GMT
 
LONDON, June 27 (Reuters) - Ivory Coast's $2.3 billion defaulted bond rose sharply to a record high on Wednesday on news the country would receive over $4 billion in debt reduction from lenders and expectations it will resume coupon payments on its bond.
Ivory Coast, the world's largest cocoa producer, has attracted risk-hungry investors given the relative scarcity of African dollar bonds.
Ivory Coast will receive more than 2.15 trillion CFA francs ($4.09 billion) in debt reduction after meeting conditions under the IMF-World Bank Heavily Indebted Poor Country (HIPC) scheme, both institutions said in a statement late on Tuesday.
Ivory Coast's dollar debt has been the best-performing emerging hard currency debt this year, according to JP Morgan, after the country repeatedly said it would again pay coupons, after three missed payments following a four-month civil war.
"The debt relief marks a crucial stage for the shoring-up of the country's sovereign debt, which reduces substantially as a result," said John Bates, head of fixed income at Silk Invest.
"Of course, the announcement of a coupon payment is great for investor confidence after three missed payments."
The next payment of more than $43 million is expected on July 2, to include a good faith payment of nearly $2.1 million against outstanding arrears.

The bond rose 1.5 points to a record 75 cents on the dollar on Wednesday, giving a yield around 8.7 percent.
The bond, which starts paying back principal ahead of maturity, traded at around 60 cents at launch in April 2010 and fell to a record low around 34 cents in March 2011, during the civil war after a disputed presidential election in late 2010.
The London Club of commercial creditors is due to meet Ivory Coast officials in Paris on Thursday and is expected to discuss repayment of the arrears, which analysts said was around $90 million.
"I expect they will try to propose an arrears clearance schedule," said Samir Gadio, emerging markets strategist at Standard Bank.
"We think they would like to pay the arrears in 2013 to 2014."
Analysts are upbeat on the bond, with Barclays recommending an overweight position with a price target of 80.
"Ivory Coast has its own story and is not so affected by anything else," said Gadio. (Reporting by Carolyn Cohn; editing by Ron Askew)

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