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London - Emerging market sovereigns have raised $11.5bn in global bond markets since the start of the year, JPMorgan said on Friday, noting this was almost a fifth of the total volume it predicts for 2012.
The recent uptick in risk appetite has allowed countries from Turkey to Mexico to tap markets, keeping bond sales volumes in line with past trends.
JPMorgan, which owns the most widely used emerging debt indices, said data for the past 10 years show average January issuance at 18% of full-year volume.
“This pace means that 19% of our full year gross issuance forecast has been issued in the first 19 days of the year,” JPM analysts said in a note.
New bonds have come this year from Indonesia, the Phillippines, Brazil, Colombia, Mexico, South Africa, Poland and Turkey, with appetite for the issues unexpectedly strong despite continued worries over the eurozone and a potential Greek default.
The latest is a $1.5bn 10-year deal from Turkey this week. It received orders of around $4.5bn.
A Phillippines $1.5bn bond sale earlier this month drew an astonishing $12.5bn in orders.
“This is telling you that this is a market where it’s possible to issue debt as liquidity is there. But the credits coming in are 'noble' credits which, too, have been forced to offer (higher) premiums,” said Luis Costa, head of CEEMEA FX and debt strategy at Citi.
Turkey, for instance, had to pay a 20 basis-point premium to its existing 10-year bond. Moreover, the recent supply glut means most new issues have fallen in the secondary markets - yield spreads on JP Morgan’s emerging dollar debt index have widened 5 bps this year.
“If you go down credit ratings spectrum, it will be hard to place bonds,” Costa said.
The recent uptick in risk appetite has allowed countries from Turkey to Mexico to tap markets, keeping bond sales volumes in line with past trends.
JPMorgan, which owns the most widely used emerging debt indices, said data for the past 10 years show average January issuance at 18% of full-year volume.
“This pace means that 19% of our full year gross issuance forecast has been issued in the first 19 days of the year,” JPM analysts said in a note.
New bonds have come this year from Indonesia, the Phillippines, Brazil, Colombia, Mexico, South Africa, Poland and Turkey, with appetite for the issues unexpectedly strong despite continued worries over the eurozone and a potential Greek default.
The latest is a $1.5bn 10-year deal from Turkey this week. It received orders of around $4.5bn.
A Phillippines $1.5bn bond sale earlier this month drew an astonishing $12.5bn in orders.
“This is telling you that this is a market where it’s possible to issue debt as liquidity is there. But the credits coming in are 'noble' credits which, too, have been forced to offer (higher) premiums,” said Luis Costa, head of CEEMEA FX and debt strategy at Citi.
Turkey, for instance, had to pay a 20 basis-point premium to its existing 10-year bond. Moreover, the recent supply glut means most new issues have fallen in the secondary markets - yield spreads on JP Morgan’s emerging dollar debt index have widened 5 bps this year.
“If you go down credit ratings spectrum, it will be hard to place bonds,” Costa said.
