Armenia: Good Story, Rich Price: Valuations look stretched as rating upgrades could take time; move UW in the EMBIGD

Research evidence excerpt

Armenia: Good Story, Rich Price: Valuations look stretched as rating upgrades could take time; move UW in the EMBIGD

J P M O R G A N Global Markets Strategy

20 July 2026

Armenia: Good Story, Rich Price

Valuations look stretched as rating upgrades could take

time; move UW in the EMBIGD

Emerging Markets Strategy

Nishant M Poojary, CFA AC

(44 20) 3493-3859

nishant.m.poojary@jpmorgan.com

Khamza Sharifzoda

• Armenia’s credit profile has improved over the past year on better regional (44khamza.sharifzoda@jpmorgan.com20) 3493-3571

geopolitics and a stronger macro story. These factors have supported tighter J.P. Morgan Securities plc

spreads and more constructive rating outlooks.

• Despite the improved narrative, a credit rating upgrade may prove to be slower

and more complex than the current market pricing seems to imply.

• The external position is improving, but the balance of payments remains

supported by sentiment-sensitive inflows rather than durable FDI.

• Progress towards a final peace deal with Azerbaijan has become procedurally

more difficult post-election and Türkiye’s stance on a border re-opening

further raises uncertainty and delays potential upside catalysts.

• Relations with Russia are a material tail risk as well, particularly via the energy

channel, given Armenia’s reliance on discounted gas and limited substitution

options.

• Against this risk backdrop, spreads look rich versus peers and we have moved

UW Armenia in the EMBIGD Model Portfolio.

Armenia’s credit story has moved in a positive direction over the past year. An

improvement in the regional geopolitics, especially related to the meaningful

progress in the Armenia-Azerbaijan peace settlement process, has been positive

for Armenia’s credit risk premium. Furthermore, the macro-economic picture has