Barclays Capital projected emerging market (EM) sovereigns to issue $96bn in foreign currency-denominated bonds in 2019, relative to an expected $141bn in 2018. It attributed the projected decline in EM sovereign debt issuance mainly to the substitution of market financing with concessional financing in Argentina, the rise in global oil prices that would reduce issuance needs in GCC countries, as well as uncertainties about further U.S. sanctions on Russia. It forecast Eastern Europe, the Middle East & Africa (EEMEA) to issue $58bn worth of Eurobonds, equivalent to 60.4% of total EM foreign currency-denominated bond issuance, in 2019, and relative to $90bn in 2018. It expected sizeable issuance in Egypt, Morocco, Sub-Saharan African and Turkey, and a decline in GCC issuances. Emerging Asia would follow with $23bn, or 24% of the total, compared to $19bn in 2018, then Latin America, excluding the Venezuelan sovereign but including the country's national oil company Petróleos de Venezuela, with $16bn (16.7%), relative to $32bn in 2018. On a country basis, it expected Indonesia to issue $10bn in sovereign Eurobonds, or 10.4% of total EM foreign currency-denominated bond issuance in 2019, which would constitute the largest level among EMs, followed by Saudi Arabia with $8bn (8.3%), Qatar with $6bn (6.2%), Turkey with $5bn (5.2%), Egypt with $4.5bn (4.7%), Oman and Poland with $4bn each (4.1% each), and the Dominican Republic and Romania with $3bn each (3.1% each). In parallel, Barclays projected interest payments and maturities to reach $85bn next year. As such, it forecast EM currency-denominated issuance, net of interest payments and maturities, at $12bn in 2019.
Sources: Barclays Capital