FOREIGN investors are unhappy with African Bank’s buyback of debt issued under its euro medium-term note (EMTN) programme, as these investors — discouraged by low interest rates elsewhere — search for yield in emerging markets.Lutz Röhmeyer, portfolio manager at Landesbank Berlin Investment, said the fund manager had tendered only a "small portion" of its holdings to the buyback because it saw further upside in African Bank, which would be paying at least 200 basis points — or 2% — less in interest following the buyback."This bank is now overcapitalised after the rescue," said Röhmeyer.Swiss franc-denominated bonds held by the Landesbank — which manages about €10bn in investments — should trade higher than dollar-denominated bonds as "everybody is looking for yield in this environment"."[African Bank’s] name is burned in the market after the rescue, and the chance that it trades up to a fair price is very low," he said."There will be a risk premium for a very long time."This risk pr...
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