America First' stalls bond issuance in emerging markets

A record start to the year for emerging-market bond sales is at risk of fizzling as high Treasury rates hamper weaker credits from tapping international capital.

- Bloomberg

While a recent surge in US bond yields has abated for now, investors fear the upward moves will resume after President-elect Donald Trump takes office on Monday, given his support for trade-tariff hikes and mass deportations, policies that are considered inflationary.

With that in mind, several EM sovereigns rushed to market as soon as 2025 got underway, taking the year-to-date tally of Eurobond sales to about $34 billion, up 12% from the same 2024 period. However, seven of this year's eight bond issuers have investment-grade credit ratings, including Saudi Arabia, Mexico and Slovenia. The exception is Benin, which managed to place a $500 million bond on Thursday.