Yield Over Fear: The EM Debt Story of 2025
1/7
Cash-Rich Investors Drive Record Issuance
Ample liquidity and a thirst for higher yields pushed investors toward EM bonds. Even during Trump’s tariff announcements or Israel-Iran tensions, buyers remained unfazed, fueling continuous primary market activity.
2/7
Geopolitical Shocks Fail to Deter Issuers
From missile strikes to tariff tantrums, markets remained resilient. BNP Paribas’ Alexis Taffin remarked, “The volumes of issuance have been incredible,” showing unwavering appetite for emerging market sovereign and corporate debt.
3/7
Oil Price Dip Fuels Gulf Borrowing
Low oil prices pushed Gulf nations like Saudi Arabia to borrow more. The region accounted for over 40% of CEEMEA debt, with $106B raised in H1 2025 alone — closing in on 2024's full-year $139B total.
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4/7
Defence and Diversification Boost Demand
Defence firms attracted strong interest amid rising NATO military budgets. Czech group CSG doubled its bond issue. Debut issuers like Maaden and Angola’s Azul Energy expanded the diversification landscape.
5/7
Shift Begins: From Dollar to Other Currencies
Issuers like Saudi Arabia and Sharjah raised debt in euros; Uruguay in Swiss francs; and others eye yen and yuan. JPMorgan’s Weiler sees this as the beginning of a broader de-dollarisation trend.
6/7
Shorter Tenors Replace 30-Year Bonds
Only two 30-year bonds were issued from CEEMEA in H1 2025. Steeper yield curves made long-term debt expensive, prompting a shift to shorter 3-year maturities for cost efficiency and flexibility.
7/7
2025 On Track for Record Year
With $190B already issued and demand showing no signs of abating, emerging market debt sales are poised to surpass 2024’s record of $285B. A resilient, yield-hungry investor base is steering the trend.(Disclaimer: This slideshow has been sourced from Reuters)