Jordan Raises $1 Billion of Notes Guaranteed by U.S.Gabrielle Coppola
Jordan, the Middle Eastern nation facing rising energy costs and an influx of Syrian refugees, sold $1 billion of U.S.-guaranteed notes in its second such offering in the past year.
Jordan sold $1 billion of five-year notes that pay 25 basis points, or 0.25 percentage point, more than similar-maturity U.S. Treasuries, according to data compiled by Bloomberg. The yield on the country’s 3.875 percent dollar bonds due in 2015 rose six basis points yesterday to 3.43 percent.
The U.S. offered to guarantee Jordan’s debt in February, six months after pledging $1.25 billion in similar support to ease the kingdom’s financing costs. The American money will augment $5 billion that oil-rich Persian Gulf nations pledged for infrastructure improvements in Jordan and will support hundreds of thousands of refugees fleeing the war in neighboring Syria.
“It’s backing a key ally in the region who is going through some extraordinarily difficult times because of civil strife in neighboring countries,” Michael Roche, an emerging-market strategist at Seaport Group LLC, said by telephone from New York. “Jordan would be hard-pressed to bring a bond to market at that kind of spread.”
Jordan, which imports almost all of its energy needs, is rated BB- by Standard & Poor’s, three steps below investment grade. The country sold $1.25 billion of U.S.-backed seven-year notes in October that paid 60 basis points more than the U.S. benchmark.