Frontier market Georgia has priced a $500m US dollar-denominated sovereign bond at a yield of 5.125%, attracting $2.8 billion of orders and marking one of the tightest pricing outcomes for a BB-rated issuer in recent years.
The Eurobond issuance, which refinances an earlier 2021 bond, was listed on the London Stock Exchange and drew demand from a broad base of global institutional investors, according to the finance ministry.
Finance Minister Lasha Khutsishvili said the transaction reflected significant yield compression versus Georgia’s previous hard-currency issuance, noting it is the lowest coupon for any sovereign BB or BB+ notes issued in the last four years.
Favorable market backdrop
The strong reception reflects a combination of supportive external conditions and issuer-specific factors, including volatility in US Treasuries boosting relative demand for emerging market debt, the limited supply and steady performance of Georgian sovereign bonds, and continued fiscal discipline underpinning low public debt levels and solid economic growth.
The final pricing compared favorably with recent issuance from investment-grade EM sovereigns, such as Poland and Saudi Arabia, as a result.
It also fits within a broader tightening trend for frontier and EM sovereign issuers, with recent transactions demonstrating strong order books and narrowing spreads as investors compete for inventory.
Funding strategy signals local-currency ambitions
Alongside the issuance, Khutsishvili signaled the government’s intention to increase its capital markets engagement and said authorities were assessing the potential for future local-currency issuance, citing “strong interest observed in securities denominated in Georgian lari (GEL)” during the transaction.
Any move toward international GEL-denominated bonds would mark a shift in Georgia’s funding mix, and reflect growing investor appetite for diversified EM debt structures featuring soft currencies.
The confidence expressed by the finance ministry follows a similarly successful issuance sale last year by Silk Road Group, one of Georgia’s largest corporates, which completed an oversubscribed issuance on Euronext Dublin.
