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ARMENIA TO ISSUE 'KARDASHIAN' BOND: KEEP UP
http://blogs.ft.com/beyond-brics/2013/09/19/armenia-to-issue-kardashian-bond-keep-up/#ixzz2fMTO1gvx
Sep 19, 2013 6:19pm by Luke Smolinski
What's the yield on that?
What's the going rate for a Kardashian? A yield of 6.25 per cent,
according to Armenia's bond issue.
The "Kardashian", as it has been dubbed by Standard Bank's head of
emerging markets research Timothy Ash, will be issued in Armenia's
first international sovereign debt sale. Named after Kim Kardashian,
a US celebrity whose family (see left) is originally from the country,
the dollar bond is the latest exotic asset to have attracted investors'
gaze.
It comes amid a flurry of bond issuances from countries taking
advantage of sustained low yields. At the end of last week, $13.5bn of
sovereign debt had been issued in September, according to JP Morgan,
compared to $2.5bn for the whole of the previous month.
Armenia is one of several countries looking to exploit the Federal
Reserve's decision on Wednesday to keep the QE machine rolling. The
move reduced borrowing costs and lifted currencies across the emerging
markets. Armenia initially offered investors a yield of 6.375 per
cent yesterday for a seven-year bond, but lowered the yield on the
same day after higher-than-expected demand. Order books for the asset
were approaching $2bn, according to reports.
Is it a good bet? The jury is out, but Armenia is very similar to
the politically stable, low-debt nation of Georgia, according to Ash.
Armenia has a BB- rating from Fitch, the same rating as Georgia's.
Both have external debt to GDP ratios of about four fifths. Armenia
is projected to have a 2.6 per cent budget deficit this year and has
a public debt to GDP ratio of about 45 per cent - similar low levels
of debt that investors have come to expect for Georgia.
The bond is fairly valued, says David Spegel, an emerging markets
director at ING. The Kardashian moniker ought to be worth a few basis
points, too. There are a swathe of issuances from frontier markets,
so anything to stand out and catch international investors' attention
isn't a bad ploy. Kenya is planning a $1.5bn bond debut and Romania
issued [email protected] worth of bonds last week.
A Kardashian or two may prove just as successful. Just don't call
them cheap.
From: A. Papazian
http://blogs.ft.com/beyond-brics/2013/09/19/armenia-to-issue-kardashian-bond-keep-up/#ixzz2fMTO1gvx
Sep 19, 2013 6:19pm by Luke Smolinski
What's the yield on that?
What's the going rate for a Kardashian? A yield of 6.25 per cent,
according to Armenia's bond issue.
The "Kardashian", as it has been dubbed by Standard Bank's head of
emerging markets research Timothy Ash, will be issued in Armenia's
first international sovereign debt sale. Named after Kim Kardashian,
a US celebrity whose family (see left) is originally from the country,
the dollar bond is the latest exotic asset to have attracted investors'
gaze.
It comes amid a flurry of bond issuances from countries taking
advantage of sustained low yields. At the end of last week, $13.5bn of
sovereign debt had been issued in September, according to JP Morgan,
compared to $2.5bn for the whole of the previous month.
Armenia is one of several countries looking to exploit the Federal
Reserve's decision on Wednesday to keep the QE machine rolling. The
move reduced borrowing costs and lifted currencies across the emerging
markets. Armenia initially offered investors a yield of 6.375 per
cent yesterday for a seven-year bond, but lowered the yield on the
same day after higher-than-expected demand. Order books for the asset
were approaching $2bn, according to reports.
Is it a good bet? The jury is out, but Armenia is very similar to
the politically stable, low-debt nation of Georgia, according to Ash.
Armenia has a BB- rating from Fitch, the same rating as Georgia's.
Both have external debt to GDP ratios of about four fifths. Armenia
is projected to have a 2.6 per cent budget deficit this year and has
a public debt to GDP ratio of about 45 per cent - similar low levels
of debt that investors have come to expect for Georgia.
The bond is fairly valued, says David Spegel, an emerging markets
director at ING. The Kardashian moniker ought to be worth a few basis
points, too. There are a swathe of issuances from frontier markets,
so anything to stand out and catch international investors' attention
isn't a bad ploy. Kenya is planning a $1.5bn bond debut and Romania
issued [email protected] worth of bonds last week.
A Kardashian or two may prove just as successful. Just don't call
them cheap.
From: A. Papazian