| News from Algeria tends to focus on the political violence and economic sabotage caused by Islamic opposition groups. Recently, however, the country's high-yielding debt has also been attracting attention. Following the long-awaited conclusion of a rescheduling agreement with the London Club of commercial bank creditors in August, Algeria has become a beneficiary of the increasing thirst for exotic risk. Debt traders see the London Club accord as a vote of confidence by creditors and it has triggered interest in Algerian paper. "The deal has come at a good time for Algeria, coinciding with a time when investors are looking to diversify their risk," says Bradley Wickens, an analyst at Banque Indosuez in London. "We've seen a huge jump in liquidity for Tranche A [the most actively traded paper]. Now Euro brokers always have a price on the screen, which wasn't the case two months ago. The bid/offer spread has tightened from 200 basis points to 75bp." Says Redwan Merouani, a director of UBAF Asset Trading in Paris: "Emerging market debt has moved up sharply since March. When more liquid instruments become too expensive, there is always a need for new frontiers. |