Ecuador, banished from international capital markets since bailing on obligations in 2008 and 2009, sold $2 billion of bonds today after rebuilding its credibility with investors.
The nation issued the 10-year dollar-denominated securities to yield 7.95 percent, according to data compiled by Bloomberg. Credit Suisse Group AG and Citigroup Inc. managed the offering.
A month ago, hedge fund Greylock Capital Management LLC said Ecuador agreed to buy back about 80 percent of remaining defaulted debt from 2008 and 2009 to help pave the way for its bond sale. Retiring the securities would help protect a new bond sale from any possible legal wrangling stemming from the default, according to Moody’s Investors Service.
The Ecuadro deal came on the heels of Kenya’s first-ever international-bond sale, which attracted $8 billion worth of orders for two chunks of bonds totaling $2 billion. The Kenya deal was the largest-ever debt sale by an African country.
Noted the WSJ, “Frontier stocks and bonds have logged better performance than their emerging-market counterparts in recent months, and have attracted increasing amounts of cash from investors. As well, Cyprus is gearing up for its first public bond sale since receiving a bailout a year ago.”