Albania is reviving plans to sell its first bonds in euros as demand for emerging-market debt pushes the borrowing costs of the poorest nation in the Balkans lower than that of neighboring Greece.
The country is seeking to sell 300 million euros ($421 million) to 400 million euros of five-year bonds that may be priced to yield about 7.5 percent, according to two people with knowledge of the sale. The yield on Greece’s note due August note due 2015 fell one basis point to 9.68 percent at 1:13 p.m. in Athens. Greece is rated BB+, the highest non-investment grade, by Standard & Poor’s, and Albania is rated three steps lower at B+.
The extra yield investors demand to hold emerging market has fallen as much as 106 basis points from this year’s peak to 248 basis points on Oct. 15, a six-month low, as concern eased Greece will default and near-zero interest rates in Europe and the U.S. spurred investors to buy higher-yielding securities, according to JPMorgan Chase & Co.’s EMBI+ Index. Albania shelved a planned debut offering in April after S&P’s downgrade of Greece sparked speculation Europe’s debt crisis would escalate.
“Now is probably the right moment to come with a new issue,” Stuart Culverhouse, chief economist at investment bank Exotix Ltd. said by phone from London. “We have seen the flurry of activity and Albania is able to capture the timing.” The 7.5 percent yield is “reasonably attractive,” he said.
News source: Bloomberg link: article
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