Ghana gets timing right at second Eurobond attempt

Better late than never. Although the messy manner of Ghana's first attempt to issue new notes last month should not be overlooked, the sovereign was vindicated by waiting for a better window.
How much investors' thirst for the paper was a reflection of their confidence in the credit or a signal of their desperation for yield is open to debate.

Not much has changed in Ghana since early August - a further disbursement of IMF funds has still not materialised, though progress with the multilateral has been made. And with a general election in December, the political backdrop could get cloudy.
Still, Ghana made the right call in moving ahead following a substantial rally in credit markets - its own bonds had seen the yield drop by more than 100bp over the past month or so.
That enabled Ghana to win its tug of war with the investor community by ripping well through the 10 percent level that became a psychological barrier for both sides.
High 9s fell to 9.25 percent for a US$750m due 2022 amortiser - a great outcome for Ghana, despite the high coupon. And for investors, too, a healthy pick up against similar-rated peers in Africa. Zambia's 2022s, for example, are trading in the mid-7s.
Whether other African sovereigns will now try and ride on Ghana's coattails remains to be seen. Nigeria is clearly looking, while Kenya has been touted as a potential candidate.
Elsewhere, there's a trio of names on the road - Otkritie, O1 Properties and MTN, though only the first is likely be in a position to issue next week (Otkritie finishes its roadshow in Singapore on Wednesday).
Meanwhile, Azeri state oil company Socar will issue on Sept. 20 dollar-denominated Eurobonds for Azeri citizens, a source in the company told Reuters on Friday.
The volume of the issue was not immediately known. Details of the issue will be presented on Sept. 16, the source said.
As for today's conditions, It's a slightly softer start to Friday morning in Europe after another fairly mixed session in Asia.
In Japan, the battle of the 17,000 level in the Nikkei continued to rage unabated. The index gap-opened up 0.2% just six points short of that level and soon broke through to peak at 17,029. That was as good as it got, though, and sellers immediately emerged taking the index down 0.3% by the break. On the resumption there was a partial recovery and a slow run-in to the weekend left it more or less flat by the close.
In China, mixed inflation numbers failed to break the Shanghai Comp out of the tight range it has been trading this week. So far the index has oscillated in a 20-point range and is off 0.3% at the lower end of that range. It's been a good day in Hong Kong, though, after Hibor fell back following the massive spike yesterday. The Hang Seng is up 1.2% and at its highest in 13 months.
Over in Europe, Bund futures are down a quarter of a point with BTPs off 10 ticks. Dax futures are slightly lower and Brent is at $49.4 having rallied from $48.4 to above $50 - for the first time in three weeks - yesterday afternoon on yet more hopes of a production freeze.
Synthetic credit is a touch wider with the Main out 1bp at 66.5bp, Crossover up 4bp at 308bp and SenFin out 1.5bp at 86.5bp.
It never ceases to amazejust how these markets behave on major central bank decisions. Just look at the price action over the ECB yesterday lunchtime. The unchanged rate announcement came with the caveat that QE will continue until the original deadline of March 2017 or beyond if necessary. That was enough to send Bunds down a quarter of a point and negate early minor gains in equities and credit. BTPs held in fairly well, though.
And then after much bluster in the statement, Draghi said in the Q&A that a QE extension had not even been discussed.
Cue Bunds dropping another half point and BTPs shedding a point. The Dax was off 1.5% and credit slipped into negative territory.
The reality is that the ECB stands ready to act if necessary and that means a QE extension, a widening of the issue limit, an expansion of the maturity buckets and even further rate cuts are still very much on the table this year if inflation and growth do not pick-up - which they probably won't.
There was a minor recovery after the initial shock, but it did not last and by the close 10yr Bund and BTP yields were 6bp higher than pre-ECB levels, and it looks like we are headed lower again this morning.