Global Markets Daily: EM Sovereign Credit Issuance — Robust in H1, With More to Come in H2

Research evidence excerpt

Global Markets Daily: EM Sovereign Credit Issuance — Robust in H1, With More to Come in H2

Economics Research

22 July 2026 | 3:01PM BST

Global Markets Daily: EM Sovereign Credit Issuance — Robust in H1,

With More to Come in H2

n Despite concerns that large amounts of AI-related debt supply may be crowding Victor Engel

+44(20)7051-3862 |

out other sectors or countries, EM gross sovereign USD bond issuance has been victor.engel@gs.com

Goldman Sachs International

robust so far this year, standing strong amid bouts of volatility. In this Global

Markets Daily, we take stock of EM sovereign issuance dynamics in H1, benchmark

these dynamics against our spread view, and provide an outlook for EM debt

supply in H2.

n Both EM IG and HY H1 issuance stand at their second-highest levels in a decade

and supply has been evenly distributed across the curve, including in the ‘super’

long-end segment despite steadily rising long-end DM funding costs. Our core

view is still that the drivers of such robust issuance include the prevalence of

favourable issuance terms, with sovereigns taking advantage of tight spreads,

and elevated investor demand for primary supply.

n Looking ahead, our updated full-year 2026 issuance forecast stands at

~US$207bn, with the lion’s share from IG (~US$137bn, 66%), and HY

contributing ~US$70bn (34%). While our forecasts appear consistent with a

bullish risk-on scenario that is not our baseline, we think they reflect a strong

technical backdrop and a large idiosyncratic issuance profile from IG GCC

sovereigns. This gross supply should translate into elevated net supply by the end

of the year, which should in turn contribute to the moderate spread widening we

expect over the next 12 months.

EM Sovereign Credit Issuance — Robust in H1, With More to Come in H2