Despite the slide, the second month-on-month decline this year, hard currency emerging market bond debt issuance this year is 60% above the same period in 2022, when anticipated central bank rate hikes and uncertainty following Russia's invasion of Ukraine dampened investor appetite for riskier assets. More than half of that $68.4 billion total was raised in a record-breaking January bond flurry.
In a note, Tellimer chief economist Stuart Culverhouse said that in April, only five countries - Bahrain, Brazil, Jordan, Mexico and Turkey - issued sovereign debt, and that most of those issuances came early. "What started out looking like it could be a strong month quickly faded," Culverhouse wrote.
Returns on emerging market bonds were also flat, according to Tellimer, mirroring the limited new issuance.
No low-income nations have issued a bond since Mongolia joined the record rush of bonds in January, and April marked a year since the last frontier sub-Saharan African bond issuance.
Sovereign bond spreads in sub-Saharan Africa have ballooned to three times the emerging market average since the world's central banks began raising interest rates, according to the International Monetary Fund.
This week Nigeria's parliament approved plans to convert 23.7 trillion naira ($52 billion) in short-term loans from the country's central bank into 40-year bonds at 9% interest. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ April's Emerging Market Sovereign Bond Issuance Slips Sub-Saharan African Bond Sovereign Spreads Soar ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Libby George Editing by Mark Potter)
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