Ashmore Favors Ivory Coast Debt as Economy Rebounds From Default

Ivory Coast government debt is becoming more attractive as the West African nation’s economy thrives, according to emerging markets investor Ashmore Group Plc.

“We really like Ivory Coast,” Jan Dehn, head of research at London-based Ashmore, which manages about $61 billion in assets, said in a June 19 interview with Bloomberg Brief Sub-Saharan Africa. “It’s a super-solid credit with extremely strong governance.”

Investor interest in the West African country, where a civil war ended in 2011, is growing, with the economy set to expand by 10 percent this year, Ivory Coast Budget Minister Abdourahmane Cisse said in an interview in Cape Town this month. The nation earns most of its foreign exchange from the export of cocoa and cashews and is also a producer of gold and oil.

Ivory Coast returned to international debt markets in July, less than four years after defaulting on $2.3 billion of notes, and sold $750 million of 10-year Eurobonds. The government will offer $1.1 billion of debt in regional markets before the end of the year, including Islamic bonds denominated in the local currency, the CFA franc, Cisse said.

“We like the long bonds, it’s an improving credit story,” Dehn said. “Ivory Coast used to be like Kenya. It used to West Africa’s biggest financial center, the most sophisticated country, and it’s very rapidly becoming that again.”

Ivory Coast is holding a presidential vote in October, with President Alassane Ouattara, 73, running in the first ballot since a disputed vote in 2010 sparked a five-month conflict that claimed the lives of at least 3,000 people.

“It looks like the incumbent is going to hold that position,” said Dehn. “He’s getting old so there is some uncertainty about his second term, but he has been rock solid as president.”

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