Key insights
- Bolivia is gauging investor interest in a new dollar bond issuance. While EM spreads have tightened, this event has a slightly negative influence on US equities as it reflects increased risk appetite for potentially unstable economies, diverting capital from safer US assets. The narrowing risk premium on Bolivian debt also suggests a search for yield, potentially at the expense of risk management.
Investing.com -- Bolivia is testing investor appetite for its first dollar bond sale in four years after the country’s new market-friendly government avoided a default on external debt payments in March.
The South American nation appointed Deutsche Bank Securities and Santander to conduct investor meetings starting Monday to assess demand for a benchmark-sized dollar note, according to a report from Bloomberg News, citing a person familiar with the matter.
The potential sale occurs as spreads on emerging-market bonds have narrowed to approximately their lowest levels since 2013, despite ongoing economic damage from the Iran conflict.
The risk premium investors require to hold Bolivia’s sovereign notes has dropped to 378 basis points over US Treasuries, the lowest level since 2020, according to JPMorgan Chase & Co. data.
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