Comments on: Ivory Coast’s bond exchange gets it exactly right http://blogs.reuters.com/felix-salmon/2010/04/12/ivory-coasts-bond-exchange-gets-it-exactly-right/ A slice of lime in the soda Tue, 21 May 2013 20:24:52 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: MFSheehan http://blogs.reuters.com/felix-salmon/2010/04/12/ivory-coasts-bond-exchange-gets-it-exactly-right/comment-page-1/#comment-13442 MFSheehan Wed, 14 Apr 2010 08:21:03 +0000 http://blogs.reuters.com/felix-salmon/?p=3353#comment-13442 If the point is retiring as much debt as possible at the lowest price, it was successful. If it is intended to encourage further investment in Ivory Coast, it is debatable as this hair cut was after the original 80% haircut. It is more a sign of the pavlovian response to any liquidity and the big institutions dominating this paper. The reality is that Ivory Coast only got HIPC terms because of French pressure within the World Bank to expand the ratios to encompass their sphere of influence in West Africa... And as to attracting further investment, Ivory Coast's French advisers have insisted (with IMF support) that they should default on recently placed local currency bonds and notes on the basis that if the holder is foreign it constitutes external debt and they must default... Something that makes one wonder if Paris Club conversion clauses continue to have validity... The fact that all the holders of the CFA paper were London based is well known... Now that is far sighted, isn't it? If the point is retiring as much debt as possible at the lowest price, it was successful. If it is intended to encourage further investment in Ivory Coast, it is debatable as this hair cut was after the original 80% haircut. It is more a sign of the pavlovian response to any liquidity and the big institutions dominating this paper. The reality is that Ivory Coast only got HIPC terms because of French pressure within the World Bank to expand the ratios to encompass their sphere of influence in West Africa…

And as to attracting further investment, Ivory Coast’s French advisers have insisted (with IMF support) that they should default on recently placed local currency bonds and notes on the basis that if the holder is foreign it constitutes external debt and they must default… Something that makes one wonder if Paris Club conversion clauses continue to have validity…

The fact that all the holders of the CFA paper were London based is well known…

Now that is far sighted, isn’t it?

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