EM Corporate Monthly (+Chartbook): Positive returns, active primary markets and relative-spread resilience

Research evidence excerpt

EM Corporate Monthly (+Chartbook): Positive returns, active primary markets and relative-spread resilience

tightened modestly in June, moving from +30bp to

+28bp. In IG, EM pickup tightened from +14bp to +12bp, led by EMEA Financials A (-

9bp), LatAm Real Estate BBB (-8bp) & LatAm Financials BBB (-8bp), while Asia Utilities

BBB (+11bp) and Asia Transportation BBB (+8bp) widened the most. In HY, EM pickup

tightened from +95bp to +90bp, led by LatAm Telecom B (-51bp), EMEA Financials B (-

35bp), Asia Financials B (-34bp) and EMEA Real Estate BB/B (-30bp/-25bp), partly offset

by LatAm Materials B (+153bp) & Asia Materials BB (+66bp). See Exhibit 1 to Exhibit 12.

6 themes you need to know from BofA EM conference

Last week we hosted our 15th annual EM corporate conference in Miami. See our

takeaways report for more detail on the key topics below and many others.

- Food inflation risk looks underpriced. Fertilizer disruption, El Niño, Ukraine and

livestock pressures EM, where food has a larger weight in household spending.

- EM private credit still needs double-digit returns to attract capital. Opportunities

in SOEs, Africa and restructured credits, but legal uncertainty remains key risk.

- AI is becoming credit-relevant, creating potential winners in infrastructure, utilities

and telecom, but also raising capex, resource & grid-constraint risk for exposed Cos.

- LatAm distressed debt remains centered in Brazil but stress is broadening to

smaller companies. Recovery is becoming more jurisdiction and structure-specific.

- Frontier corporates are becoming a HY extension, driven by mispriced country risk,

ratings ceilings and liquidity discounts. Value lies in hard-currency strong businesses

- Spreads remain supported by strong demand and low net supply, but returns should