EM bonds totaled $321B in first half of 2024, but slowdown is ahead
After a blockbuster six months, the sale of emerging-market bonds in hard currencies is set to slow down sharply in a second-half that’s littered with political risk.
The amount of debt sold by government and corporate borrowers in developing markets has reached $321 billion in the busiest first-half since 2021, according to data compiled by Bloomberg. Still, forecasts from JPMorgan Chase & Co. and Bank of America Corp. show issuance is poised to slow more than usual after borrowers rushed to meet their funding needs at the beginning of the year.
As governments from France to Bolivia face political upheaval, Thursday’s US debate also brought the White House race into clearer view, with analysts warning of more global volatility that could keep EM issuers at bay. The fear of such turbulence has already partly pushed borrowers to load up on as much debt as they could, leaving less supply for the remainder of 2024.
“In terms of 2024 funding need, probably 80% is already done,” said Alexander Karolev, head of bond syndicate for Central and Eastern Europe, Middle East and Africa at JPMorgan. “The volumes that we’ve seen so far are not going to be sustainable.”
While it’s common for bond auctions to taper off in the second-half, this year saw a particularly fast start as renewed access to markets for many frontier issuers and juicy yields fueled a 32% surge in sales from the first six months of 2023, the biggest increase since 2017.
Among borrowers, Saudi Arabia dethroned China as the most prolific seller with around $35 billion in deals. International debt issued by sub-Saharan African nations rose from zero in the second half of 2023 to $11 billion, while Latin America’s biggest economies — Brazil and Mexico — pulled a
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