Latin America, July 23, 2025 – Latin American sovereign hard currency issuance surged to USD38.6 billion in 1H25, a 54% increase from the previous year and nearly matching the total for all of 2024, Fitch Ratings says in a new report. Ten sovereigns accessed external markets despite global geopolitical volatility and persistent high US policy rates, as emerging market sovereign spreads narrowed since the April ‘Liberation Day’ spike. However, volatility could return after the US tariff pause ends in August.
Issuance continues to be mainly in US dollars (73%), but this proportion is down from 91% in the first half of 2024, reflecting increased regional interest in diversifying currency exposure. Chile and Mexico issued euro bonds and Uruguay debuted Swiss franc bonds, while Panama stayed out of capital markets but raised significant funds via euro and Swiss franc loans. Activity also continued in global local currency-linked bonds (Dominican Republic, Paraguay).
Barbados returned to international markets with bonds featuring the world’s first pandemic clause, following its 2019 bond with natural disaster provisions. Fitch rated the bond in line with the sovereign’s rating, noting that payment deferrals under the clause would not be considered a default.
Distressed emerging-market sovereign spreads have tightened, although market access for some remains a challenge. Ecuador saw the biggest gain after re-electing a market-friendly government and reaffirming its IMF commitments; Argentina also saw narrowing spreads after securing a new IMF program and receiving a large upfront disbursement. Bolivia still faces high yields, rising default risks, and uncertain prospects ahead of elections and a large bond payment in 2026.
Source: Fitch Ratings
Atlantic Investors Service 