Executive Summary: EM ex-Asia credit markets saw mixed performance this week, with selective weakness across CEEME and Africa offset by idiosyncratic moves in LATAM corporates. Broader sentiment was muted amid heightened geopolitical risk in the Middle East; macro view remains cautious with beta reduced into March ahead of key US NFP and CPI releases.

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*Weekly Snapshot: Key Drivers & Regional Flows*

Regional Credit Developments

🌍 EM Ex-Asia Credit: CEEME

• COLOM: Clear underperformer; curve +20bp/+31bp wider and prices down -50ct/-1.88pt w/w, driven by local political risk (Invamer poll).
• REPHUN: Lagged due to threats to block EU sanctions; $ curve finished +8bp/+10bp and € curve +4bp/+8bp.
• ROMANI: Priced large €2.25bn 7Y and $2bn 10Y; new paper traded heavy with €33s and $36s down -7ct and -25ct below reoffer.
• UKRAIN: Closed weaker as mood deteriorated following Hungary’s move to block the €90bn EU loan package.

🌍 EM Ex-Asia Credit: Africa

• EGYPT: Recovered midweek after IMF confirmed the release of $2.3bn; curve finished unch/-1pt on the week.
• SENEGL: Spiked +1.25pt on IMF speculation before fading to +13ct/+63ct w/w after clarification on data misreporting.
• GABON: Recovered from Fitch warning after president instructed securing an IMF deal by May; ended unch/-25ct w/w.

🌍 EM Ex-Asia Credit: Latin America

• RAIZBZ: Volatile on Shell/Cosan capitalization headlines; curve finished -25ct/-2pt though 27s outperformed (+1.5pt).
• PARGUY: Tapped $300mm of 55s; tender offer expiration prompted positive secondary moves of +15ct/+65ct.

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness.

AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.

Executive Summary: EM ex-Asia credit ended the week on a firmer note amid macro support from firmer US data and buy-back demand, rebounding from mid-week softness driven by rates rallies and risk-off flows. HY names traded ‑13ct/‑50ct mid-week but recovered; IG spreads widened +2bp/+5bp early before stabilizing. Ukraine and SSA front-runners outperformed on geopolitical headlines and bank trips, while Latam corporates—notably RAIZBZ—faced heavy pressure on parent-company risk. Geopolitics drove Ukraine swings; SSA short-end rallied on IMF updates; Latam was buoyed by improving US ties (Argentina/Colombia); and corporates remained volatile on structural credit events.

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*Weekly Snapshot: Key Drivers & Regional Flows*

Sovereign Highlights

🇺🇦 Ukraine

• Ukraine (A/B/C): Volatile week with +0.125/+0.375 on Friday amid FT-reported “ceasefire enforcement procedure” (Ukraine/Europe/US agreement), offset by Russia tensions.
• Weekly Performance: As +25ct/+38ct, Bs ‑13ct/+25ct, Cs ‑63ct. Mid-week dips on prisoner swap headlines and macro weakness.

🌍 Sub-Saharan Africa Sovereigns

• Nigeria/Egypt: Firmed flat/+0.25pts; broadly stable.
• Kenya: Underperformed ‑0.50/‑0.125pts.
• Zambia: Rebounded (A +0.125pts, B +1.125pts) after Morgan Stanley sell note.
• Senegal: Led gains with +0.375/+1.125pts (short-end strong), +2.38pt/+5.25pt w/w on bank trips.
• Others: Angola flat; Gabon +0.50pts early; Lebanon +0.625pts/‑0.25pts on IMF visits.

🇧🇷 Latin America

• Argentina: Non-eventful (‑0.10/+0.15pts) despite US tariff-scrapping deal.
• Ecuador: Flat mid-week after ‑0.75/‑0.50pts earlier.
• Colombia: Flat short-end/+0.10/+0.35pts long-end on Trump/Petro meeting and Cepeda primary ineligibility.
• Venezuela/PDVSA: ‑0.35/‑0.15pts.
• Costa Rica: +0.10/+0.40pts post-Fernandez election.

🇹🇷 Other Sovereign

• Turkey: €2bn 8Y printed at 5.15%; $ curve unch/‑1bp tighter.

Corporate Highlights

📈 EM Corporates

• RAIZBZ: Sharp selloff ‑25pt/‑30pt w/w (27s ‑35pt) on Cosan/Shell headlines—redemptions of 30s/31s, no coverage for $4bn shortfall, and new legal advisor hire. Curve ‑7.125/‑5.875pts mid-week, short-end weakest.
• CSNABZ: Sympathy pressure ‑6.25/‑1.25pts w/w; Fitch BB‑/RWN. Plans $1.5bn secured loan for bond maturities.
• FECCN: +0.25pts on M&A/debt exchange.
• WOMCHI/WOMMOB: Unchanged on asset sale rumors.

Key Themes

Geopolitics drove Ukraine swings; SSA short-end rallied on bank trips and IMF updates; Latam was buoyed by improving US ties (Argentina/Colombia); corporates remained volatile on parent company risks.

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.

Executive Summary: EM ex-Asia credit saw a relatively quiet close despite mid-week volatility from Ukraine rally and SSA rebounds. Ukraine bonds gained +1.75pt to +2.25pt on the week after Trump’s call with Putin pausing energy strikes, while Gabon continued rallying +0.375pts on World Bank loan talks. In Asia, New World bonds surged 4-10pts on Blackstone investment rumors, offsetting softer sentiment from potential US-Iran tensions and Hutchison port issues. Overall, HY names showed dispersion with real money demand supporting select credits amid weekend risk reduction.

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*Weekly Snapshot: Key Drivers & Regional Flows*

Regional Credit Developments

🌍 EM Ex-Asia Credit

• Ukraine: Started strong on Russia talks but retraced before rallying on Trump’s strike pause agreement. A-notes +1.75/+2.25pt, B-notes +1.5/+2.5pt, C-notes +2pt on the week.
• Gabon: SSA sovereigns continued rally with +0.375pts weekly gain on $500m World Bank loan negotiations.
• Zambia: Bonds flattened post-IMF $190m disbursement amid weaker reserve projections; SSA sovereigns rebounded +0.25/+0.625pts overall.
• Argentina: Bonds rose 0.325-1.9pts applying Ecuador’s issuance success template, plus FX accumulation gains.
• Ecuador: Ended flat/+0.25pts after profit-taking following successful primary issuance.
• Venezuela/Pdvsa: Firmed +0.10/+0.50pts on recovery potential expectations.

🇨🇳 Asia Credit: China Property & HY

• New World Development: Complex rallied sharply 4-10pts (especially perpetuals) on Blackstone shareholder investment talks, despite company denial. Strongest performer of the week.
• China Property Sector: Eased red lines boosted distressed bonds; Dalwan gained +1.5pts post-pricing on policy support.
• Indonesia HY: Dipped 25-50c on MSCI free-float adjustment concerns impacting equity sentiment.
• New PLN IJ Bonds: Mixed performance amid equity market rout but closed near reoffer levels showing resilient demand.

🌏 Asia Credit: Frontier & Sovereign

• Sri Lanka/Pakistan: Frontier sovereigns remained firm with steady real money demand.
• Vedanta: Gained on stake sale announcements improving liquidity profile.
• Biolin: Advanced on credit rating upgrade momentum.
• Bahrain: New 8Y issue actively traded, outperforming other tenors in debut.
• Romania: Dollar-denominated bonds lagged Euro equivalents in secondary trading.

Trading Flows & Technicals

Flows balanced with real money demand in Ukraine, SSA top picks, and Asia HY squeezes early week, turning selective late amid Iran strike fears and CK Hutchison weakness. Corporate standouts included LIQTEL (+2.5pts) and GeoPark (+1.25pts) gaining on strong results and M&A activity.

Week Ahead Outlook

Monitor Ukraine truce implementation following strike pause agreement, Ecuador secondary market reaction to new issuance, Argentina FX reserve accumulation momentum, and Asia equity market impacts from MSCI Indonesia constituent review. Potential US monetary policy shifts under Warsh nomination may weigh on broader EM risk appetite.

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.

Executive Summary: Geopolitical Whiplash & The “Greenland Relief” Rally — The trading week was defined by significant volatility stemming from transatlantic trade tensions, which eventually gave way to a powerful relief rally. Markets initially shuddered as the U.S. administration reignited tariff threats against the EU over the Greenland dispute. However, by week’s end, a relief rally sparked in global risk assets after a framework deal was secured, leading to a forceful squeeze in risk assets. While macro headlines dominated, idiosyncratic stories in Ukraine, Gabon, and India provided significant dispersion across credit stacks.

Market Visualizer

*Weekly Snapshot: Key Drivers & Regional Flows*

Regional Credit Developments

🌍 EM Ex-Asia Credit

• CEE & CIS – Ukraine (UKRAIN): The complex experienced a roller-coaster week, trading as high as +3pts mid-week on headlines regarding frozen assets. Gains were partially pared later in the week, with the curve finishing down -1.25/-0.25pts after the Kremlin noted the “territorial issue” remains unresolved.
• CEE Sovereigns – Romania: Euro-denominated bonds outperformed, tightening -5bp to -7bp.
• Hungary (REPHUN): Active in new issues with flows skewed toward hedge fund selling versus real money demand.
• SSA – Gabon (GABON): A star performer, rallying +4.25pt to +4.5pt and closing at highs on IMF headlines regarding an economic growth program.
• Benin (BENIN): Priced an inaugural 7Y sukuk at 6.2%. While the new issue initially failed to perform, it made outstanding Benin bonds look cheap, leading them to close +0.625/+1.0pts higher by week’s end.
• Senegal (SENEGL): Remained an outlier for much of the week, trading down early before rebounding +0.75/+1.0pts without new headlines.
• LatAm – Argentina (ARGENT): Continued its march higher, finishing +0.25/+1.0pts on the back of steady IMF growth projections and accelerated FX purchases.
• Ecuador (ECUA): Announced plans to issue a new 7Y and 12Y bond for $3-4b gross to finance a tender offer.
• Brazil – CSN/Braskem: CSN bonds dropped -1.0pt to -2.0pts following an S&P downgrade to B+. Braskem bonds saw volatility as investors monitored reports of an out-of-court restructuring plan.
• Middle East – Lebanon (LEBAN): Lebanon bonds rebounded +0.50pts to +0.625pts following news of an upcoming IMF mission in February.

🇨🇳 Asia Credit: China Property & HY

• Shuion: The new Shuion deal outperformed, trading up 1.5pts vs. reoffer.
• Vanke: Sentiment was supported by reports that SZ Metro will fund upfront payments for onshore bonds.

🌏 Asia Credit: Frontier & Sovereign

• India – Adani Complex: Diverged from the broader rally, trading 20bps wider for Investment Grade and -1pt to -1.5pts for High Yield. The move followed headlines that the SEC is asking a U.S. court for permission to serve summons directly to the Adanis to advance a fraud case.
• India NBFCs – Infoline: NBFC bonds were down 0.5pts after the income tax department ordered a special audit.
• Pakistan: A frontier outperformer, trading up 0.5-1pt on news of a projected $10bn investment from China.

Key Themes & Trading Flows

• The “Greenland Hedge”: Early week trading saw a risk-off tone as tariff concerns resurfaced amidst transatlantic tensions.
• Relief Squeeze: Trump’s Davos speech and subsequent restraint on tariffs sparked a relief rally, with High Yield cash moving +25ct to +1pt higher.

Week Ahead Watch Items

• Trump/Zelensky Meeting: Market watching for progress on the latest peace plan.
• Ecuador Issuance: Monitoring the market reception of the $3-4b gross new money deal.
• Adani Legal Filings: Monitoring U.S. court developments regarding SEC summons.
• Japan Politics: Assessing the impact of snap elections on global macro sentiment.

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.

Executive Summary: The trading week ending January 16, 2026 presented global credit markets with a striking paradox: a forceful “squeeze” in risk assets characterized by high-yield spread compression and duration-buying in Investment Grade (IG) names, occurring simultaneously with intensifying Middle East geopolitical tensions centered on Iran and potential U.S. intervention. This technical demand reflects cash-rich investors forcing capital into markets to capture yields before potential Fed rate cuts later in 2026. The catalyst was a softer-than-expected U.S. Core CPI print that reignited the “soft landing” thesis and forced under-invested cash off the sidelines. High-yield names generally tightened +13ct to +50ct, reversing weakness from prior sessions, while IG duration saw sustained buying interest.

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*Weekly Snapshot: Key Drivers & Regional Flows*

Macro & Geopolitical Backdrop

The U.S. Core CPI release came in lower than consensus expectations, dismantling fears that persistent inflation would force indefinite Federal Reserve restrictiveness. The “squeezy” tone reflects a shortage of paper in dealer inventories—market makers had run light positions anticipating Middle East volatility, but when macro data greenlit a rally, the lack of offers exacerbated the move as buyers chased the market.

The Iran Binary Trade: Geopolitical risk in the Middle East is behaving in binary fashion. The market oscillates between fear of regional war (typically widening spreads) and cynical trading that U.S. strikes might reshape regional power dynamics to benefit specific distressed credits. This “binary” trade is visible in divergence between Lebanon (the long leg) and Egypt (the short leg).

Regional Credit Developments

🌎 EM Ex-Asia Credit: Latin America

• Colombia Sovereign: Successfully priced massive $4.95 billion external bond deal—largest in history. 5Y and 7Y tranches trading +70ct above reoffer vs 3Y at +35ct. Orders reached $23.2B at peak. Political catalyst: Abelardo de la Espriella leading polls with 28% support, defeating Petro’s candidate by 9pp in projected runoff. Curve tightened -1bp/-4bp on market-friendly regime change expectations ahead of May 2026 elections.
• CSN (Brazil): Announced aggressive divestment plan targeting BRL 15-18 billion ($2.8-$3.3B) to reduce net debt/EBITDA from 3.14x to 1.0x target. Full sale of cement unit and significant infrastructure stake sales. Mining division retained. Bonds rallied +1.5-3pts as credit investors view this as necessary deleveraging to avoid downgrades.
• Venezuela (PDVSA): Complex experienced high volatility following Trump administration executive order shielding oil revenues from U.S. creditors. Initial -2pt reaction, ultimately closing -1.5pt/-2pt lower, highlighting extreme legal/political fragility of recovery value.
• Braskem Idesa (Mexico): BAKIDE bonds rallied +2pts to 63.25/65.25 following company “cleansing statement” interpreted as step toward resolving liquidity bottlenecks with PEMEX feedstock supply contracts.

🌍 EM Ex-Asia Credit: Sub-Saharan Africa

• Mozambique: MOZAM bonds underperformed, dropping -2.5pts before recovering to -1.25pts. President Daniel Chapo (inaugurated Jan 15) stated debt renegotiation talks will only start AFTER reaching IMF program agreement. Market fears this IMF-first approach will lead to deeper haircuts via Debt Sustainability Analysis “comparability of treatment.” MOZAM 2031s (legacy Tuna Bonds) holders disappointed by procedural delay.
• Egypt: European Commission disbursed €1 billion MFA on Jan 15—first of three installments under €4B operation. Provides relief for balance-of-payments pressures from Ukraine war, Middle East conflicts, Red Sea disruptions. However, curve had earlier widened -38ct/-1.13pt on Iran escalation headlines with steepening indicating long-term solvency fears should Suez revenues be impaired.

🇨🇳 Asia Credit: Hong Kong Property

• New World Development (NWDEVL): Week’s star performer. Senior bullets rallied +1-1.5pts; perpetual bonds surged +3-6pts on market speculation (denied by company) that Marriott might acquire Rosewood Hotel brand. NWDEVL equity +10%. Market thesis: if company monetizes hospitality assets, liquidity runway extends significantly, removing immediate default risk. Step-up perps outperformed on increased redemption/tender probability.
• Sympathy Rally: Lai Sun (LAISUN) and Far East Consortium (FAECÃO) both +1-2pts on similar asset-rich, liquidity-poor profiles. Hong Kong property equities strong YTD with SHKP, NWD, Henderson Land up 12-13%, supporting credit sentiment.
• SHK & Co: New 6.75% issuance underperformed, breaking -1pt before recovering to -0.25pt on private-bank buying, highlighting market preference for hard-asset stories over financials.

🇮🇳 Asia Credit: India NBFC Structural Upgrade

• Shriram Finance (SHTFIN): S&P upgraded to Investment Grade (BBB-/Stable from BB+) on Jan 15; short-term rating to A-3 from B. Catalyst: US$4.4B capital infusion from MUFG Bank for 20% stake. Risk-adjusted capital ratio expected to exceed 20% in FY26-27/FY28 vs prior 13.75-14.75% expectation. Bonds rallied +0.25-0.5pt. Major implications: allows IG-only mandates to buy, creating permanent new demand; compresses spreads across other high-quality NBFCs; projected cost of funds to fall 10-30bps over next two years.
• Adani Ports (ADSEZ): Moody’s revised outlook to stable from negative, cementing Adani complex rehabilitation post-Hindenburg.
• Vedanta (VEDLN): Bonds continued grinding higher +0.25pt amid ongoing deleveraging efforts in 13.875% 2028s and 9.25% 2026s.
• Indika Energy (INDYIJ): Indonesian energy bonds rallied +0.5pt on sector compression buying.

🌏 Asia Credit: Technicals & New Issuance

• IG Tone: Mixed but resilient. Spreads 1-4bp tighter across Meituan curve and A-rated credits. Steady reception for high-quality new issues (SK Battery, Posco). Indonesia 3-part sovereign slipped 0.5-1pt below reoffer.
• HY Compression: Recurring theme with buying in West China Cement (WESCHI), NBFCs, frontier sovereigns. Japan names weaker -0.25-1pt on profit-taking.

Key Themes & Trading Flows

Geopolitics vs. Technicals: Across EM ex-Asia and Asia, geopolitical risk generated intraday volatility, but strong Real Money demand, improving fund flows, and constructive macro kept risk tone underpinned, especially in higher-beta sovereigns and HY corporates.

Relative Value Activity: RV trades picked up with swaps and CDS printing across EGYPT, TURKEY, BAHRAIN, COLOMBIA, GCC curves. Long: Bahrain/Turkey. Short: Egypt (proximate risk to Israel/Gaza/Suez).

Frontier & SSA: Buying in Dominican Republic and Costa Rica (curves steepened +5bp/+10bp but remain crossover favorites). Selling Senegal (underperformed -50ct/-1pt). Pakistan flat, awaiting next IMF review.

Week Ahead Watch Items

• Iran Developments: Any direct retaliation will impact market sentiment. Brent crude movement above $85/bbl could signal rotation patterns.
• Mozambique: Market watching for any evolution in President Chapo’s stance on IMF-first debt renegotiation approach.
• TMT M&A: Further developments on Tigo/Movistar Chile discussions being monitored.
• Colombia Elections: Poll monitoring continues ahead of May 2026 elections.
• Hong Kong Property: Asset sale announcements from NWD complex or other developers remain in focus.

REFERENCES & SOURCES

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

AI Generation Notice: This newsletter has been generated using Artificial Intelligence technologies including Gemini AI and Perplexity AI for research synthesis. All factual claims have been verified against primary sources listed above. Users should independently verify critical data points. Past performance is not indicative of future results.