EM Sovereign Credit Strategy: Rich & Cheap Watch

Research evidence excerpt

EM Sovereign Credit Strategy: Rich & Cheap Watch

Update

May 27, 2026 03:32 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 remains unchanged at 242bp in the past week (1W). Morgan Stanley & Co. International plc+

Spreads widened the most in B and tightened the most in BB Neville Z Mandimika

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

and tightened the most in Asia. 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 Qatar, Mexico, Turkey, and Senegal. The richest are Saudi Guru.Sharan.Agrawal@morganstanley.com +91 22 6995-3035

Arabia, Azerbaijan, Ivory Coast, and Ukraine. See Exhibit 1.

EM Sovereign Market Composite

5s10s spread curves: IG curves steepened by bp to 28bp and HY curves steepened Sovereign Ratings and Market Pricing – IG and

by 2bp to 54bp in the past 1W on aggregate. On an absolute basis, Kenya and Ivory BB

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

basis, South Africa and Uruguay are the steepest, while Saudi Arabia and Honduras Bond 5s10s Curves Snapshot

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

CDS Snapshot

10s30s spread curves: IG curves steepened by 2bp to 20bp and HY curves

ESG Snapshot

steepened by 2bp to 38bp in the past 1W on aggregate. On an absolute basis, Egypt

Defaulted / Flat Trading Bonds Overview

and South Africa are the steepest, while Kenya and Indonesia are the flattest. On a