MNI EM Credit Weekly

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EXECUTIVE SUMMARY:

• EM $ indices were materially tighter (-16bp) as markets demonstrated real optimism around tariff discussions, supported by a more benign geopolitical backdrop in the Middle East and low issuance levels.
• ASIA $ index spreads outperformed. ASIA and LATAM indices having established new YTD tights. Primary market activity was low, only $9bn of supply, the bulk of which originated in CEEMEA ($6bn). LATAM had no new issuance over the week.
• In ASIA, Thailand and Korea underperformed on tariff risks. Indian company Vedanta continued to deleverage, with an equity stake sale boosting valuations.  China Vanke received another loan from Shenzhen Metro to support refinancing.
• In CEEMEA, uncertainty around Senegal’s public finances keeps pressure on sovereign bonds. Nigeria completed IMF consultations but looks largely priced. Tabreed remains acquisitive, but we expect management to protect IG rating.
• LATAM didn’t see primary supply this week, though this followed a very strong period in the previous week. We continue to await the IMF decision on a $2bn loan to Argentina and note possible $ bond buybacks from Colombia.
• In the week ahead, focus remains on tariffs, with the U.S. deadline fast approaching. President Trump is expected to send letters on new tariff levels today – potentially triggering volatility, with spreads skewed to widening.