Bahrain sold $1.5 billion of bonds,
joining issuers from Indonesia to Petroleos Mexicanos after
developing-nation yields fell from a 21-month high.

Emerging-market borrowers raised at least $13 billion since
July 10, when comments from Federal Reserve Chairman Ben S.
Bernanke tempered speculation the U.S. would scale back
stimulus. Yields had soared to 5.54 percent June 24, the highest
since 2011, as Bernanke signaled he may reduce bond purchases
that had fueled gains in developing-nation assets. Yields were
at 4.78 percent yesterday, the Bloomberg USD Emerging Market
Sovereign Bond Index showed.

“Investors are happy that the rate environment has calmed
down a lot,” providing an opportunity for issuers, Spencer Maclean, the head of syndicate for western European debt capital
markets at Standard Chartered Bank in London, said by phone
yesterday. “September and October are going to be busy, so if
you can beat the rush now you ought.”

Bond sales are gathering momentum again after emerging-market countries and companies raised a record $657 billion in
the first half of this year, up from $559 billion in the same
period of 2012, data compiled by Bloomberg show. Bahrain waited
to sell after concluding its bond road show June 18, issuing 10-year bonds at a yield of 6.20 percent, down from about 6.50
percent that was initially proposed, said a person with
knowledge of the deal, who asked not to be identified because
the information is private.

Sales Outlook

Bahrain sold 10-year bonds last year at 6.14 percent.
Yields on those bonds rose 29 basis points, or 0.29 percentage
point, to 5.89 percent yesterday. The offering was the first
from the six-nation Gulf Cooperation Council since Dubai sold
bonds in January.

“Issuers such as Bahrain met everyone last month in hope
the pre-August window would open,” Richard Segal, the head of
international credit strategy at Jefferies Group Inc. in London,
said by e-mail. “Bernanke has more recently calmed bond market
sentiment and this provided issuers and investors with more
confidence that yield levels will stabilize.”

Moody’s placed Bahrain’s debt on review for a possible
downgrade last month due in part to the “high and rising” oil
price needed to balance its budget. The kingdom of Bahrain is
rated Baa1 at Moody’s, the third-lowest investment grade, and
BBB at Standard Poor’s, the second-lowest. The rankings put it
on a par with Mexico, Russia and South Africa.

Bahrain’s fiscal deficit will widen to 4 percent to 5
percent of gross domestic product this year from 2.6 percent
last year, Moody’s Investors Service said in June, citing data
from the International Monetary Fund.

Indonesia Sale

Indonesia sold $1 billion of 10-year bonds on July 10 to
yield 5.45 percent, the highest rate for a 10-year note from the
country since it paid 6 percent in January 2010, data compiled
by Bloomberg Show. Pemex issued $3 billion the following day.
Naspers Ltd (NPN), Africa’s largest media company, raised $750 million
on July 11 and a further $250 million July 16.

Africa’s largest power producer, Eskom Holdings SOC Ltd.,
is holding investor meetings in the U.K. and U.S. this week as
it needs to fill a $25 billion funding gap, Hilary Joffe, a
spokeswoman for the state-owned company, said in an e-mailed
response to questions July 22.

Ghana is also holding a road show this week for its second
Eurobond sale, seeking to raise $1 billion, according to Adams Nyinaku, the head of treasury at the Accra-based Bank of Ghana.

First Bank of Nigeria hired Citigroup Inc. and Goldman
Sachs Group Inc. for dollar bond investor meetings, according to
a person with knowledge of the offering who asked not to be
indentifed.

Yields on 10-year U.S. Treasuries have fallen to 2.60
percent from a July 5 close of 2.74 percent that was the highest
in two years. That compares with this year’s low of 1.63 percent
on May 2.

“At the end of June no investors were prepared to stick
their necks out,” Doug Bitcon, a fund manager at Rasmala
Investment Bank Ltd. in Dubai, said by phone. “There’s been a
period of stability, maybe seven days when the 10-year
Treasuries have been range bound. On the back of that investors
have come back into the market.”

To contact the reporters on this story:
Lyubov Pronina in London at
lpronina@bloomberg.net;
Samuel Potter in Dubai at
spotter33@bloomberg.net

To contact the editor responsible for this story:
Gavin Serkin at
gserkin@bloomberg.net