British multinational universal bank Barclays estimates that emerging market sovereign international bond sales will reach as much as $160 billion this year, and around $130 billion next year, according to a Reuters report.
A sovereign bond is a debt security issued by a national government to raise money for its operations, pay down old debt, pay interest on current debt.
Bond supply from Eastern Europe, Middle East and African (EEMEA) governments is estimated to reach $75 billion in 2025, followed by Latin America at $31 billion and Asia at $22 billion, the London-headquartered bank said.
Unlike 2024, when bond sales from investment grade sovereigns dominated issuance, 2025 could see more supply from riskier ‘BB’-rated government issuers, with Turkey -one of the heaviest issuers in emerging markets- leading alongside Brazil, Colombia and South Africa.
Investment grade refers to bonds or other debt securities that have been rated by credit rating agencies as having a relatively low risk of default.
Earlier this month, S&P Global raised Turkey’s long-term sovereign credit rating to BB- from B+ with a stable outlook.
“The Central Bank of the Republic of Turkiye’s (CBRT’s) tight monetary stance has enabled Turkish authorities to stabilize the lira, bring down inflation, rebuild reserves, and de-dollarize the financial system,” it said in a statement.
“Turkiye’s savings gap with the rest of the world has narrowed, which is visible in the approximately 4 percentage points of GDP decline in the current account deficit since 2022,” it added.
However, the agency warned that it could lower the ratings if pressures on Turkey’s financial stability, or wider public finances were to intensify.
Saudi Arabia and the United Arab Emirates, Nigeria, Angola, Senegal and Kenya along Egypt are expected to tap international capital markets next year, Barclays said.
