High-yielding sovereign issuances in emerging markets will rise to nearly $ 60 billion (Getty)Estimated bank concluded Goldman Sachs To be issued Sovereign debt in a Emerging markets In 2021, it may reach about $ 140 billion, roughly the same level as this year, with a surge in high-yield bond sales due to a slowdown in the category of investment-worthy issuances.
The bank said, according to Reuters, today, Monday, that in light of the increased need for financing as a result of the Covid-19 pandemic, countries classified in the category worthy of investment rushed to issue bonds, which raised sovereign debt sales in emerging markets since the beginning of the year to 145 billion dollars. , At the highest level of the historical range.
Countries facing the risk of defaulting on their debts have found it more difficult to enter the market, as evidenced by the Turkish sovereign investment fund and Naftogaz last month postponing the sale of bonds due to market volatility before the US presidential election and high borrowing costs.
The bank confirmed that its expectations for an increase in the issuance of high-yield bonds next year partly reflect its expectation of better prospects with an improvement in risk appetite that helps countries rated their high-risk debt.
Analysts Teresa Alves and Sarah Jarrat said in a report that high-yield sovereign issuances in emerging markets will rise to about $ 60 billion from $ 45 billion in 2020, in exchange for a slowdown in investment-worthy issues to about $ 80 billion from $ 100 billion.
The Gulf region and Latin America will likely remain the largest regional emerging market issuers of bonds next year, with sales of about $ 37 billion and $ 32 billion, respectively, followed by Asia, the analysts added.
The bank said that the increase in debt maturities in 2021 indicates the net issuance is still relatively moderate, and it is expected that Saudi Arabia, Qatar, Egypt and Mexico will be the highest in terms of net issuances next year.
In contrast, it is not expected to sell dollar-denominated bonds from Hungary and Croatia, which have switched to financing themselves mainly from the euro or their local currencies, as well as countries that issue high-yield bonds, such as Sri Lanka and Oman, which is due, among other things, to the high risk of default.
(Reuters)
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