Key Players and Their Bond Sales
Countries like Saudi Arabia, Mexico, Turkey, and Poland have kicked off 2026 with a record-breaking start in emerging market debt issuance, selling over $40 billion worth of international bonds.
Saudi Arabia’s Oil-Backed Bond Sale
Saudi Arabia, an oil-rich nation, has already issued $11.5 billion in US dollar-denominated bonds.
Mexico’s Historic Debt Sale
Mexico, the largest borrower in emerging markets, has conducted one of its largest debt sales in history, raising $9 billion in the market with over 200 institutional investors.
Israel’s Bond Sale Amidst Gaza Ceasefire
Israel has sold $6 billion in bonds amidst the still fragile ceasefire in Gaza.
Hungary, Poland, and Turkey’s Bond Sales
Hungary has raised $3 billion, Poland $3.25 billion, and Turkey $3.5 billion.
Chile’s Latin American Debt Sale
Chile has sold $3 billion in the Latin American market.
Factors Driving the Bond Frenzy
The recent decline in global interest rates, combined with the exceptional returns on emerging market debt for investors over the past year, has turned the usual January round of government financing into a frenzy.
Implications for Investors
The eagerness to issue debt also highlights the significant drop in premiums that investors now demand for buying emerging market debt instead of US Treasury bonds, the primary driver of global borrowing costs.
Forecast for 2026
According to Morgan Stanley, emerging market sovereign debt sales reached a record high of $268 billion last year. JPMorgan, another US investment bank, predicts that this year will once again surpass $200 billion.
Key Questions and Answers
- Who are the key players in this emerging market debt issuance? Saudi Arabia, Mexico, Turkey, Poland, Israel, Hungary, and Chile are among the major issuers.
- Why is there a surge in emerging market debt issuance? The combination of lower global interest rates and high returns on emerging market debt has created a frenzy among investors.
- What does this mean for investors? The decrease in premiums demanded by investors for emerging market debt indicates a more favorable investment climate.
- What is the projected debt issuance for 2026? Based on previous trends, emerging market sovereign debt issuance is expected to exceed $200 billion for the second consecutive year.
