Ghana launches $2 billion 10-, 30-year paper; EM a bit firmer as oil rises, dollar slides

By Paul A. Harris

Portland, Ore., May 10 – Emerging markets debt saw modest improvement on Thursday, as the dollar declined against foreign currencies on the back of a tame inflation report that is seen as unlikely to sidetrack central bankers intent on moving rates higher in the months ahead, a trader said.

Continued rallying in crude oil prices also lent some buoyancy to the asset class, especially to those names with significant exposure.

The barrel price of West Texas Intermediate crude for June 2018 delivery rose 26 cents, or 0.37%, to $71.40 on Thursday.

However the asset class continues to labor against headwinds including rising U.S. interest rates, trade barriers and geopolitical headline volatility, the trader said.

Those factors in conjunction with cash flows that have been strongly negative, year-to-date, are eroding prices and impeding issuers, the source added.

In the primary market Ghana (B3/B-/B) launched $2 billion of global bonds on Thursday, according to a market source.

The deal includes a tranche of 10-year notes launched at 7 5/8%, tight to early talk in the low 8% area, and 30-year paper launched at 8 5/8%, tight to initial guidance in the low 9% area.

Tranche sizes and final terms remained pending at press time on Thursday.

Bank of America Merrill Lynch, Citigroup, JP Morgan and Standard Chartered are managing the sale.

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