Jamaica sold $350m of 32-year bonds this week, suggesting emerging market debt investors are still out in force in spite of recent jolts to financial markets.

The order book for the bonds was more than five times over-subscribed, showing strong appetite on the part of investors for the first sovereign issue to come from an emerging market borrower since last week’s sell-off.

Jamaica’s new bonds were the longest-dated debt at the lowest coupon ever issued by the nearly 3m-strong Caribbean nation, one of the hosts of the cricket World Cup competition which opens on Sunday in the capital, Kingston.

The bonds were sold to yield 8.125 per cent, equivalent to almost 3.5 percentage points more than US Treasury yields, according to a filing with the US Securities and Exchange Commission.

Strong demand allowed the Jamaican government to borrow $100m more than expected and made the debt cheaper than the initial talk of an 8.25 per cent yield.

About three quarters of orders came from the US and the remainder from Europe.

The bonds, sold on Thursday, are due to be repaid in three annual instalments beginning in March 2037. The structure – already employed in bonds issued by Panama and Uruguay – helps smaller countries avoid a single large payment coming due in one year.

Jamaica issued $250m of 30-year bonds in February last year.

Risk premiums on emerging market debt have shrunk dramatically in recent years and were close to all-time lows before last week’s market turmoil. Although they have risen in the past 10 days, they remained at less than half their levels two years ago.

Jamaica is rated in junk territory at B+ by Fitch Ratings, B1 by Moody’s Investors Service and B by Standard and Poor’s.

Olga Kalinina, credit analyst at S&P, said she expected recent “prudent” macroeconomic policies to be continued.

“The stable [rating] outlook balances recent positive developments in the real economy and the ongoing commitment to reasonable fiscal and monetary stances with continuing difficulties in achieving fiscal targets and sustainably reducing the debt.”

The country’s inflation rate has declined from 14.1 per cent in 2003 to 5.8 per cent last year, according to a filing with the SEC. Exports rose almost 30 per cent in the first 11 months of 2006 compared with the same period in 2005, led by alumina, bauxite, coffee, mineral fuels and crude materials.

Jamaica had $5.8bn of external debt at the end of last year.

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