UPDATE 1-Ivory Coast bond rises on attack on presidential palace

(Updates price, adds quote, background)

LONDON, April 5 (Reuters) – Ivory Coast’s defaulted $2.3
billion bond rose above 50 cents on the dollar on Tuesday as
forces loyal to presidential claimant Alassane Ouattara launched
a major assault on the presidential palace, raising expectations
of payment on the bond.

The 2032 bond rose 3 points to 52 and its yield fell 0.76
percent to 12.3 percent (XS0496488395=R: Quote, Profile, Research) by 0930 GMT, its lowest
since mid-December, according to Reuters data, as expectations
grew that incumbent Laurent Gbagbo would soon be ousted by
Ouattara.

Outtara, internationally recognised as the winner of the
Nov. 28 election in the world’s top cocoa producer, is seen as
more likely to pay out on the defaulted bond. Ivory Coast missed
a $29 milllion interest payment at the end of January.

A spokesman for Ouattara’s government said late on Monday
his troops had already taken control of Gbagbo’s official
presidential residence, but his statement could not be
independently verified. [ID:nLDE73401F]

“The violence means people assume the endgame is under way,
that Ouattara will win and resume debt servicing,” said Graham
Stock, chief strategist at Insparo Asset Management.

“I think that’s a bit optimistic — the upturn in violence
does not necessarily mean the end is in sight, and the cost of
the conflict is going to undermine the fiscal position for the
new government. It’s not obvious that debt servicing is going to
be a priority.”
(Reporting by Carolyn Cohn; Editing by Catherine Evans)

UPDATE 1-Ivory Coast bond rises on attack on presidential palace