EM Sovereign Credit Strategy: Rich & Cheap Watch

Research evidence excerpt

EM Sovereign Credit Strategy: Rich & Cheap Watch

Update

May 12, 2026 02:40 PM GMT

Morgan Stanley & Co. LLCMEM Sovereign Credit Strategy | Global Simon Waever

Strategist

Rich & Cheap Watch Simon.Waever@morganstanley.comEmma C Cerda +1 212 296-8101

Emma.Cerda@morganstanley.com +1 212 761-2344

EMBIG-D tightened by 7bp to 235bp in the past week (1W). Morgan Stanley & Co. International plc+

Spreads tightened the most in B and tightened the least in BBB Neville Z Mandimika

rating categories. Region-wise, spreads tightened the most in StrategistNeville.Mandimika@morganstanley.com +44 20 7425-2509

SSA and tightened the least in Central & North America. Morgan Stanley India Company Private Limited+

Guru Sharan Agrawal

Country level: The cheapest countries based on 6m Z-scores across each rating

category are currently Abu Dhabi, Mexico, Sharjah, and Senegal. The richest are Guru.Sharan.Agrawal@morganstanley.com +91 22 6995-3035

Israel, Azerbaijan, Uzbekistan, and Ghana. See Exhibit 1.

EM Sovereign Market Composite

5s10s spread curves: IG curves steepened by 2bp to 26bp and HY curves flattened Sovereign Ratings and Market Pricing – IG and

by 1bp to 49bp in the past 1W on aggregate. On an absolute basis, Kenya and Ivory BB

Coast are the steepest, while Qatar and Abu Dhabi are the flattest. On a 6m Z-score Sovereign Benchmark Bond Valuations

basis, Philippines and Mexico are the steepest, while Turkey and Trinidad & Tobago Bond 5s10s Curves Snapshot

are the flattest. See page 13. EUR vs. USD Bonds Snapshot

CDS Snapshot

10s30s spread curves: IG curves flattened by 1bp to 21bp and HY curves flattened

ESG Snapshot

by 1bp to 39bp in the past 1W on aggregate. On an absolute basis, Egypt and Angola

Defaulted / Flat Trading Bonds Overview