EM Sovereign Credit Strategy: Rich & Cheap Watch

Research evidence excerpt

EM Sovereign Credit Strategy: Rich & Cheap Watch

Update

June 9, 2026 03:00 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 2bp to 235bp in the past week (1W). Morgan Stanley & Co. International plc+

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

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

and tightened the most in Latin America. Morgan Stanley India Company Private Limited+

Guru Sharan Agrawal

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

category are currently Saudi Arabia, Kazakhstan, Colombia, and Ghana. The cheapest Guru.Sharan.Agrawal@morganstanley.com +91 22 6995-3035

are Abu Dhabi, Indonesia, Sharjah, and Senegal. See Exhibit 1.

EM Sovereign Market Composite

5s10s spread curves: IG curves steepened by 1bp to 28bp and HY curves flattened Sovereign Ratings and Market Pricing – IG and

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

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

Uruguay and Peru are the steepest, while Turkey and Trinidad & Tobago are the Bond 5s10s Curves Snapshot

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

CDS Snapshot

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

ESG Snapshot

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

Defaulted / Flat Trading Bonds Overview

Africa are the steepest, while Kenya and Indonesia are the flattest.