Frontier market Georgia has set an impressive precedent for EM hard currency debt coming to market to start 2026, after a $500 million issuance at 5.125% arrived on London Stock Exchange last week - one that beckoned $2.8 billion in total interest, a massive oversubscription, from a broad mix of global institutional investors.
With the refinancing of an earlier issue from 2021, the country's Finance Minister Lasha Khutsishvili celebrated significant yield compression for this run, one that snuck it below any bond from a BB or BB+ rated sovereign in the last four years, according to the ministry.
Indeed the yield outcome is comparable to debt from better rated, much larger (and recognized darling) EM sovereigns like Poland or Saudi Arabia.
Favorable Backdrop
The heady result for Georgia reflects a combination of factors and prudent timing: ruction in the US treasuries market making EM Debt broadly more attractive; the relative scarcity of Georgian debt (and familiarity with the 2021 issuance from a liability management perspective); and continued fiscal discipline and currency stability supporting low public debt levels and healthy economic growth in the keystone Caucasian republic.
Frontier issuances elsewhere have seen similarly strong interest and narrowing yields, which suggests wider potential for further tightening, robust demand for a strong emerging markets DCM run in 2026, as well as a supportive environment for local currency-dominated issuance ambitions.
Going Local?
To that end, in his statement, Khutsishvili hinted at both further active capital markets engagement and a future local-currency bond that could materialize, given "strong interest observed in securities denominated in Georgian Lari (GEL)" during this cycle.
That confidence was also reflected when of the country's largest corporates, Silk Road Group, completed a similarly successful issuance on Euronext Dublin last fall.
