External publications

Sailing into stormy waters: the return of expensive eurobond debt

Dryden, Alex / Ulrich Volz
External Publications (2026)

published on findevlab.org, 27.07.2026

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Developing country borrowers are once again in turbulent seas. For many emerging and low-income countries, capital markets promised access to affordable, long-term finance for development and climate resilience. But as global interest rates rose sharply between 2021 and 2022 and investor appetite for developing country debt cooled, these promises proved increasingly elusive. Many developing countries effectively lost access to international capital markets. In 2025, market conditions had eased, allowing some developing countries to regain access to bond markets. This partial reopening allowed countries to once again issue expensive Eurobonds. So far in 2026, Sub-Saharan African Eurobond sales are off to their fastest start to a year in 13 years, raising more than $10bn in the first half of 2026. However, the outlook has once again clouded over. Conditions briefly tightened after the conflict in Iran began in March: the yield on the Bloomberg EM USD Aggregate Index rose to 6.2%, around 0.6 percentage points higher in less than a month.

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