Suriname Said to Win Better Terms in $550 Million Overseas Sale

  • South American country increases amount on offer, lowers yield
  • Suriname economy forecast to contract 2% this year, IMF says

The Republic of Suriname, the junk-rated South American country with a population lower than the state of Wyoming, is obtaining financing from investors willing to look past its ailing economy.

The country sold $550 million of 10-year bonds to yield 9.25 percent, according to a person familiar with the matter who asked not to be identified because he wasn’t authorized to discuss it. Suriname had initially planned to sell just $500 million of bonds at a 9.5 percent interest rate. Proceeds will be used to redeem notes it issued earlier this year and for a loan to oil company Staatsolie Maatschappij Suriname NV, among other purposes.

The sale is the first long-term overseas bond for the country, which has a $4.9 billion economy and is rated four levels below investment grade by S&P Global Ratings. Global investors willing to take a risk are hunting for notes that pay a hefty interest rate amid negative yields on about $10 trillion of government bonds issued in Europe and Japan.

The “yield is interesting but the country is small,” said Ray Zucaro, the chief investment officer at RVX Asset Management LLC in Miami.

Suriname’s economy is expected to contract 2 percent this year, according to the International Monetary Fund. The IMF approved in May a $478 million stand-by arrangement for Suriname on condition that it reform its exchange rate and restore fiscal accounts. Suriname’s exports are mostly alumina, gold and crude oil.

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