For one emerging-markets issuer at least, the US-led invasion of Iraq has proved a bonus.
On January 21, the Government of Jamaica launched and priced a five-year, e200 million benchmark bond. Commerzbank Securities and Deutsche Bank were joint lead managers.
Jamaica wanted to do the deal 12 months ago, but worries about Iraq forced it to wait. Tourism accounts for by far the largest single chunk of Jamaica's exports of goods and services – 37% of the $3.2 billion total in 2002. If there was a war, investors feared, anxious Americans would not take foreign holidays and all destinations would suffer.
By the end of the summer, it was clear that they had only got it half right. Fewer US holidaymakers were travelling to Europe. But more were travelling to nearby destinations such as the Caribbean.
Bounce-back from two-year dive "Investors thought that the war would be a very negative development for Jamaica," says Roman Schmidt, Commerzbank Securities' global head of debt capital markets. "But six months later, tourist receipts were actually up." From January to September 2003, visitors to Jamaica spent around $970 million, reversing a two-year decline.