Gabon's dollar bonds emerged as the worst performers in emerging markets this week following investor calls regarding new security sales. Participants reported inquiries into the government's debt disclosure and a forecast budget shortfall of 5.4% of GDP for next year. The Ministry of Economy and Finance reports consolidated debt at 9.53 trillion CFA francs ($16.3 billion), down from a prior estimate of 11.7 trillion CFA francs, though still above July's disclosure of 9.4 trillion CFA francs.
Confusion persists as investors reconcile prior estimates with current audit findings. The government declined to comment on the figures. This yield surge may hinder a planned $580 million debt offering.
The spike in Gabonese yields coincides with a broader surge in global bond rates, with 10-year US Treasuries hitting their highest level since 2002. Despite the market volatility, the OPEC member's dollar debt underperformed globally among frontier sovereigns for the week through Oct. 2. The yield on the 2033 dollar bonds soared to a record 13.1% before retreating to around 12.98%.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing