Riskiest Governments Race to Sell Bonds

Some of the world’s riskiest government borrowers were rushing to sell bonds on Thursday, taking advantage of the still rampant search for yield amid an era of record low global interest rates.

The Wall Street Journal - Ben Edwards 19/03/2015

Some of the world’s riskiest government borrowers were rushing to sell bonds on Thursday, taking advantage of the still rampant search for yield amid an era of record low global interest rates.

Armenia, Bulgaria and Ecuador are all lining up to sell debt, and despite the feeble ratings and even Ecuador’s recent experience of defaulting on its debt, investors expect the bonds to sell well while the returns available in much of the steadier end of the bond market are so slender.

“If there’s any point this year when you go for it, now is the time,” said Simon Quijano-Evans, an emerging-market analyst at Commerzbank. “There is very little supply of emerging-market sovereign debt out there, so these deals will find strong demand because of the high liquidity that’s out there.”

Junk-rated Armenia is seeking to issue a 10-year dollar bond for only the second time on record, with bankers working on the deal suggesting a yield in the area of 7.625%. The country is seeking to raise $500 million.