Delivery trucks, carrying cocoa beans, outside a facility in San-Pedro, Ivory Coast, on Friday, Oct. 27, 2023. Cocoa prices are at an all-time high as production in West Africa declines. Now an EU regulation meant to stop deforestation threatens to push prices even higher. Despite the upgrade, Ivory Coast’s eurobonds maturing in 2033 fell 0.1 cents to 91.74 cents on the dollar as of 1:18 p.m. in London on Monday, according to indicative pricing compiled by Bloomberg. The note maturing in 2037 also declined by 0.1 cents to 99.94 cents on the dollar.
“While Côte d’Ivoire could still offer a pick-up over South Africa dollar bonds based on fundamentals and as South Africa is seen as a more established emerging market, the current spread has room to narrow, especially after the rating upgrade,” said Samir Gadio, head of Africa strategy at Standard Chartered.
The fact that Ivory Coast’s bonds trade “materially wide” to South Africa’s reflects “the broad outperformance of South Africa dollar bonds since the formation of the government of national unity in June” in South Africa, Gadio said.
South African dollar-denominated notes due in 2032 offered a yield of 6.34% as of Monday, compared with the 7.62% yield on Ivory Coast’s notes maturing in 2033.