Emerging bond sales picked up significantly in the past week after a two-month lull, with sovereigns raising almost $4 billion on global markets after zero issuance in June and more is expected in coming days. Commerbank debt strategist Dmitry Sentchoukov estimates that emerging entities - sovereigns, state-run and private firms - placed a total $7.7 billion worth of bonds since July 1.
Of this week's volume, Poland accounted for $1.5 billion, Croatia raised $1.25 billion while Mexico sold 850 million euros in the bond markets. That brings year-to-date sovereign bond issuance to $46 billion, or 68 percent of planned volumes, J.P. Morgan said.
In the quasi-sovereign space, deals include a $1 billion bond from Russia's Sberbank and two issues of $500 million each by Korean state-run banks. However the worries have eased somewhat, helping shrink emerging sovereign bonds' premiums to US Treasuries by almost 30 basis points and encouraging issuance. But Sentchoukov contrasted the issuance volumes with March when emerging entities placed bonds worth $40 billion.
Big sovereign and quasi-sovereign issues likely next week include a $2 billion 10-year bond from Ukraine, a $3.5 billion issue from Qatari Diar, the property arm of the gas-rich country's sovereign wealth fund and possibly a 500 million-euro issue from Brazil's development bank BNDES.
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