Trump Policy Jitters Spur Record $26 Billion Bond Flurry in Emerging Markets

(Bloomberg) -- Emerging market governments have notched up the busiest start to a year for bond sales on record, scrambling to lock in funds before US President-elect Donald Trump takes office.

Developing nation sovereigns sold $26 billion in the first seven days of 2025, according to data compiled by Bloomberg. Investors fear Trump’s inauguration later this month could herald trade policies that bring pain for emerging markets, and US yields are on the rise.

“Issuers all come straight out of the gates early in the year, but this time they certainly have the Jan. 20 date in mind,” said Sergey Goncharov, a money manager at Vontobel Asset Management in Miami.

After the busiest year for emerging market bond sales in half a decade, challenges are mounting. Bonds and equities fell broadly on Wednesday, following a CNN report that Trump is considering declaring a national economic emergency to push through his tariff plans.

So far, only investment-grade emerging-market countries have tapped international markets. And issuers are playing it comparatively safe by opting for medium and shorter maturities, Goncharov said.

Last year’s top EM issuer, Saudi Arabia, opened the market with a $12 billion sale, and was followed by a $8.5 billion sale from Mexico. Issuance from Hungary and Slovenia accounted for the rest. Indonesia was in the market on Wednesday selling eight and 12-year bonds in euros.

Despite the selloff on Wednesday, the extra yield investors demand to hold dollar bonds from emerging markets rather than those of the US remained near the lowest level since 2018, according to a Bloomberg index.

“We will see some issuers, sovereigns and corporates, trying to issue before January 20 to lock in still-decent yield levels,” said Sergey Dergachev, head of emerging-market corporate debt at Union Investment Privatfonds GmbH in Frankfurt. “There might be some uncertainty how the UST levels will develop after Trump assumes office.”

After outflows last year, EM funds attracted $259 million in the week through Jan. 1, Bank of America said, citing EPFR Global data.

“A lot of sovereigns that need to issue will try to do as soon as possible,” said David Hauner, a London-based strategist at Bank of America. “That should be okay to absorb,” he said, predicting EM sovereign issuance would come in $14 billion lower than the 2024 total of $211 billion.