Ivory Coast\u2019s eurobonds rallied after the nation\u2019s credit score was lifted by Moody\u2019s Investors Service, which cited the resilience of the economy and rising private sector investments.<\/p>\n\n\n\n
The company on Saturday\u00a0raised\u00a0the West African nation\u2019s rating one level to Ba2, two levels below investment grade. <\/p>\n\n\n\n
The upgrade helps Ivory Coast join South Africa as the highest rated sovereign in sub-Saharan Africa after Botswana<\/strong>. The outlook was moved to stable from positive, according to a Friday statement.<\/p>\n\n\n\n Yields on all of Ivory Coast\u2019s dollar bonds were falling Monday. The yield on debt maturing in 2028 declined 13 basis points to 7.22%, notching the biggest one-day drop since Jan. 19 and taking it to the lowest level in nearly a month. <\/p>\n\n\n\n The improvement continues a trend of falling yields on the dollar debt of the world\u2019s largest cocoa producer, with its notes due 2033 down around 239 basis points since reaching record highs in April 2022.<\/p>\n\n\n\n Ivory Coast \u201cis today one of the most attractive countries on the continent which continues to show robust long-term prospects,\u201d the Finance Ministry said in a statement following the ratings announcement.<\/p>\n\n\n\n Moody\u2019s forecasts the $70 billion economy will expand 7% until 2026 led by private sector investment. Foreign direct investment into the nation rose 15% in 2022 while neighboring Nigeria saw an outflow. <\/p>\n\n\n\n The upgrade comes amid \u201cincreasing resilience and diversification of Ivory Coast\u2019s economy, which is underpinned by robust growth prospects and rising competitiveness,\u201d analyst Elisa Parisi-Capone wrote. <\/p>\n\n\n\n The credit assessor also touted to fiscal consolidation efforts under the current program with the International Monetary Fund as well as the government\u2019s debt management. The nation sold its first dollar bond in almost seven years in January. <\/p>\n\n\n\n Fitch Ratings and S&P Global Ratings score the country a notch lower than Moody\u2019s and assign it a stable outlook.<\/p>\n\n\n\n \u2018Well Received\u2019<\/strong><\/p>\n\n\n\n \u201cStrengthening in the bonds since the announcement points to the fact that it has been well received by the market,\u201d said Thalia Petousis, a portfolio manager at Allan Gray.<\/p>\n\n\n\n Ivory Coast\u2019s sovereign eurobonds are one of the largest positions in the Allan Gray Africa Bond Fund she said. The appeal came from high growth over several years, with a strong track record of private-sector led growth, job creation, and good capital investments. <\/p>\n\n\n\n The nation also benefits from low CFA Franc in-country borrowing yields said Petousis, and was \u201cdefacto guaranteed by France\u201d which has been a stabilizing factor in terms of national inflation. <\/p>\n\n\n\n \u201cIvory Coast has a manageable debt burden of of about 56% GDP and a lengthy debt maturity profile, as well as lower interest costs as a percentage of tax revenue compared to South Africa,\u201d she said. \u201cOn this basis, the Moody\u2019s upgrade is not a surprise to us.\u201d<\/p>\n\n\n\n
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