Weekly Updates

Executive Summary: During the week of 13–17 July, EM credit markets experienced choppy trading with EM Agg ending +4.65bp wider and EMHY underperforming EMIG. Middle East escalation dominated, with US–Iran strikes and Iranian/Houthi threats driving oil toward the high-$80s and widening MENA CDS. Egypt and Bahrain were clear underperformers in MENA, while oil exporters Gabon and Mozambique outperformed importers. LatAm sovereigns proved relatively resilient, with Argentina completing a $4.3bn bond payment and Peru’s May economic activity contracting 1.1% m/m.

Market Visualizer

Regional Credit Developments

🌍 EM Ex-Asia Credit

• EM Agg / EMHY / EMIG: EM Agg index ended week +4.65bp wider; EMHY underperformed EMIG at +6bp versus +4bp; CDXEM45 closed down 24c on the week.
• MENA / Middle East: Regional risk elevated amid US–Iran strikes and Iranian/Houthi threats around Gulf and Red Sea energy routes; oil prices moved toward high-$80s per barrel; MENA CDS widened, particularly for Egypt, Bahrain, Turkey and Pakistan.
• Egypt: Sovereign bonds traded -75c/-2.13pts on the week; Egypt 5y CDS widened +21bp WoW.
• Bahrain: Sovereign curve traded weaker amid broader MENA HY risk-off and active cash/CDS flows.
• Kenya: Kenya is considering buying back up to $500mn of Eurobonds to extend maturities and ease repayment pressures; KENINT curve closed -1.375/-1.25pts WoW; headlines also included extension of reduced fuel VAT and expectations for FX reserves to rise from Safaricom divestiture proceeds and World Bank funding.
• Senegal: Creditors began informal talks on potentially forming a group if government proceeds with debt rework; Debtwire reported Senegal is appointing Lazard as debt adviser; public-sector debt cited at 128.6% of GDP; SENEGL curve closed flat/+1.0pts WoW, outperforming SSA.
• Gabon: Oil exporter outperformer with bonds +75c/+88c on the week; Gabon oil curve saw buying interest alongside higher oil prices.
• Mozambique: President Daniel Chapo said in Friday Bloomberg interview that country is making progress toward debt-restructuring deal with China similar to Brazil agreement and is seeking new IMF program this year; MOZAM bonds ended +0.25pts WoW.
• Nigeria / Angola / Gabon oil curves: Oil curves saw buying interest during week as higher oil prices supported sector performance.
• Romania: Sovereign bonds widened early in week amid renewed political deadlock and early-election headlines, then recovered into week-end.
• Serbia: Issued new 6y €500mn Eurobond at 4.75% via private placement on Monday; new bonds trading around reoffer; existing SERBIA bonds were -1.0/-0.875pts lower on the week.
• Ukraine: Trading was volatile with early selling in the Bs, squeeze higher on street shorts, then renewed RM/HF selling; President Zelenskyy named Naftogaz CEO Sergii Koretskyi as next prime minister; Zelenskyy ousted defense minister Mykhailo Fedorov, prompting Kyiv protests; Naftogaz announced restructuring of approximately €1.2bn of Eurobonds; UKRAN curves were 1.20/1.50pts below intra-week highs and closed at A +0/+0.375pts, B -0.25/+0.375pts, C +0.25pts.
• Kernel: Kernel Holding reported that combined Russian missile and drone attacks on nights of 10–11 July and 11–12 July caused significant damage to port infrastructure in Chornomorsk and disrupted operations; assessment of damage, losses and required capex ongoing; KERPW bonds unchanged WoW.
• airBaltic: Company announced bondholder general meeting on 3 August to propose interim financing, capitalizing upcoming coupons, and loosening Trust Deed meeting/quorum mechanics to accelerate restructuring; AIRBAL bonds down -10pts on week.
• Peru: Central Bank data released Wednesday showed economic activity in May contracted 1.1% m/m sa, the weakest since March and below Bloomberg consensus; decline concentrated in fishing and related manufacturing; PERU curve widened +2/+4bps WoW; Peru 5y CDS ended unchanged.
• Argentina: Completed $4.3bn payment on USD-denominated bonds; June inflation rose 1.9% m/m, third consecutive monthly slowdown and lowest since August, slightly below Bloomberg consensus of 2%; EUR warrants saw over $200mn of trading and RM demand, closing +30c WoW; secondary sovereign curve closed -0.375/-0.125pts on week and 5y CDS unchanged WoW.
• Aeromexico: Reported 2Q26 results with adjusted EBIT margin of 4.6%, within 4–7% guided range and below Bloomberg consensus of 5.7%; margin contracted 3% YoY from higher jet fuel costs, partial fare readjustment and World Cup-related demand impact in June; company stated it recaptured 75% of fuel cost increase, versus prior guidance of 50%; AEROMX bonds -1.0/-0.50pts WoW.
• Brazil ethanol blending policy: Parliament approved increase in ethanol blend in domestic gasoline to 32% from 30% on Tuesday for 180 days with possibility of one 180-day extension; measure could add up to 1bn liters per year of ethanol demand; Mines and Energy Ministry stated decision aims to reduce reliance on imported fossil fuels amid volatile global oil and fuel markets; FSBIOE bonds -0.625pts WoW reflecting Fitch downgrade impact; RAIZBZ bonds -0.375pts WoW.
• Braskem: Economico reported Wednesday that bondholders including Elliott Investment Management and Strategic Value Partners presented restructuring proposal involving dilution of current shareholders; BRASKM bonds down -5/-4pts WoW under severe pressure.
• MV24 / MVFPSO: Fitch upgraded MV24 to BBB- from BB+ with Stable outlook Wednesday, citing improved sovereign and Petrobras credit quality, better transaction performance metrics and DSCRs; MVFPSO bonds +0.75pts WoW.
• Cosan: Moody’s downgraded from Ba3 to B1 with Negative outlook, following S&P downgrade last week; action concluded review for downgrade initiated 24 February after Raizen S.A. announced restructuring and related uncertainties; CSANBZ bonds -0.50pts WoW.
• CSN: Debtwire reported Thursday CSN remains in discussions with 2028 bondholders on exchange into new amortizing 2030 bonds with 9%+ coupon; resolution could depend on cement stake sale progress; CSN’s $1.2bn bridge loan coupon would increase 100bps if 2028 bond refinancing not completed by end-August; CSNABZ bonds -1.0pts/flat WoW.
• Movida: Released preliminary 2Q26 results Thursday with net income of BRL136mn, more than double year-ago and above market consensus; MOVIBZ bonds -0.375pts WoW.
• Ecopetrol / Brava Energia / 3R Petroleum: Brava Energia announced Thursday that Brazil’s securities regulator lifted suspension of Ecopetrol’s Brava Energia takeover bid, allowing tender offer to proceed; ECOPET curve unchanged on week; RRRPBZ bonds +0.75pts WoW.
• Petroperu: Debtwire reported 13 July that Petroperu is nearing access to first $500mn of financing line following establishment of special purpose vehicle; Chairman expects funding backed by government guarantee of up to $2bn under Emergency Decree 003-2026 with regaining access to financing and supplier credit; no exact disbursement date specified; PETRPE bonds +1.375/+1.625pts WoW.
• Brazil oil sector / PETBRA / CFELEC: Brazilian oil-related sovereign and corporate curves saw buying interest over week amid higher oil prices; PETBRA and CFELEC outperformed earlier in week as LatAm corporates experienced selling pressure in recent new issues and metals/mining.
• Uruguay: Sovereign underperformed among LatAm IGs over the week.
• Colombia: Sovereign performance supported by headlines on IMF and US Treasury technical assistance related to fiscal reset.
• SoftBank Group: S&P revised SoftBank Group outlook from Negative to Stable Thursday, citing sharp rise in Arm share price since end-March 2026; SoftBank Group equity closed week -14.9% impacted by weaker AI sentiment in US/Asia; SOFTBK senior unsecured bonds -1.0/-0.375pts WoW and subordinated bonds -1.25/-0.75pts WoW.

🇨🇳 Asia Credit: China Property & HY

• No material developments reported this week.

🌏 Asia Credit: Frontier & Sovereign

• Pakistan: CDS widened during week in context of broader MENA and Frontier sovereign risk repricing and higher oil prices.
• Turkey: CDS widened during week in context of broader MENA and Frontier sovereign risk repricing and higher oil prices.

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