The beginning of the year has seen a surge in emerging-market bond sales, but this momentum is at risk as higher US Treasury rates pose challenges for weaker credits. While some countries and companies have managed to tap into international capital markets, the trend favors higher-rated borrowers. This shift highlights the vulnerability of high-yield borrowers to changes in global financial conditions, leaving them with limited options. The situation is further complicated by expectations of inflationary policies from the incoming US administration, which could exacerbate borrowing costs.
In recent weeks, several emerging-market sovereigns have rushed to issue bonds, taking advantage of a brief lull in rising US yields. By early 2025, the total value of Eurobond sales had reached approximately $34 billion, marking a 12% increase compared to the same period in 2024. However, most of these issuers boast investment-grade credit ratings, including nations like Saudi Arabia, Mexico, and Slovenia. Benin stands out as an exception, successfully placing a $500 million bond despite its lower rating. Meanwhile, corporate and government-linked borrowers with junk ratings have struggled, with debt sales totaling around $6 billion so far in 2025—a decline of 7% from the previous year.
The preference for higher-quality credits reflects broader market concerns about future interest rate movements. Investors are wary that US Treasury yields may rise again after President-elect Donald Trump takes office, given his support for policies that could fuel inflation. In response, many high-yield borrowers are exploring alternative funding sources, such as private markets or bridge loans, to navigate the challenging environment. For instance, Angola recently secured $1 billion in financing through repo operations, while Pakistan is preparing to debut yuan-denominated bonds. These unconventional approaches offer flexibility in terms of size and duration, making them attractive options for borrowers facing tight public market conditions.
Despite the current challenges, there are signs of stabilization in US Treasury yields, which have retreated to around 4.6% in recent days. This has reassured some investors, who now anticipate potential Federal Reserve interest-rate cuts. Additionally, historical data shows that high-yield bond sales have experienced slow starts in the past three years, following a boom in January 2021. Analysts believe that once the uncertainty surrounding the Trump inauguration subsides, issuance activity will likely resume, with investment-grade borrowers leading the way. High-yield borrowers may follow suit once market conditions improve further.
As the year progresses, emerging-market borrowers will need to carefully monitor global financial trends and adapt their strategies accordingly. The ability to secure financing in a changing economic landscape will be crucial for maintaining stability and growth in these regions. With various factors at play, including policy shifts and market dynamics, the coming months will test the resilience of emerging-market economies and their access to capital.
In a significant move, California voters have overwhelmingly approved numerous local bond measures aimed at upgrading and maintaining school infrastructure. The November ballot saw 205 out of 267 proposed bonds pass, reflecting strong public support for educational investments. This includes substantial funding for urban districts like Los Angeles Unified and rural areas across the Central San Joaquin Valley. The approval rate of 77% is just shy of the historic high since 2000. Additionally, parcel taxes also saw success, with nearly all passing, highlighting the community's commitment to supporting their schools financially.
The passage of these bonds will enable critical improvements in school facilities, from addressing overcrowding to modernizing aging buildings. Notably, some measures barely missed passing by only a few votes, underscoring the close scrutiny and importance of community engagement in such initiatives. Despite challenges in predominantly rural and low-property-wealth districts, the overall trend indicates a strong desire to invest in education and ensure that students have access to quality learning environments.
Urban and Growing Regions Lead the Charge
Major urban centers and rapidly expanding regions have taken significant steps to enhance their educational infrastructure. Cities like Los Angeles, San Jose, and San Francisco have secured massive funding through bond measures, enabling them to tackle pressing needs such as overcrowded classrooms and deteriorating facilities. For instance, Los Angeles Unified’s $9 billion bond will address various infrastructure projects, while San Jose Unified’s $1.15 billion measure includes funds for staff housing, showcasing a holistic approach to improving the educational experience.
These urban districts are not alone; growing communities in the Central San Joaquin Valley have also embraced the need for expansion. Clovis Unified and Sanger Unified, both anticipating population growth, passed multimillion-dollar bonds to build new schools and complete ongoing construction projects. Superintendent Corrine Folmer of Clovis Unified emphasized the importance of maintaining current standards while meeting future demands. Similarly, Sanger Unified plans to construct a new elementary school to alleviate overcrowding, ensuring that all students have adequate space to learn. These efforts reflect a proactive stance towards accommodating increasing enrollment and providing top-tier educational facilities.
Rural Districts Face Challenges but Show Resilience
While many rural and low-property-wealth districts faced challenges in passing bond measures, several still managed to secure voter approval despite economic constraints. Earlimart Elementary in Tulare County achieved the highest approval rate statewide at 81.6%, demonstrating strong community support even in less affluent areas. However, other districts narrowly missed passing their proposals, sometimes by just a handful of votes, highlighting the delicate balance between community needs and financial limitations.
In contrast, some rural districts struggled to gain sufficient backing due to high tax rates and economic hardships. Del Norte Unified, for example, faced difficulties with mold-infested portable classrooms and hazardous playgrounds, yet voters rejected the bond measure due to concerns about household necessities. Brie Fraley, an active bond supporter and parent, noted that the structure of bonds in California does not adequately assist the neediest communities. Despite these challenges, nearly all parcel taxes passed, indicating a willingness among residents to contribute to their schools' well-being. This resilience underscores the ongoing commitment to improving educational outcomes, even in the face of adversity.
Un haut fonctionnaire israélien a exprimé son intention de renverser le gouvernement si celui-ci ne prenait pas des mesures plus radicales concernant la Bande de Gaza. Le ministre des finances, connu pour ses positions extrêmes, a critiqué l'accord de cessez-le-feu récemment mis en place dans cette région, qualifiant cet accord de capitulation. Cette décision a été précédée par une série d'événements politiques majeurs qui ont affecté la stabilité du gouvernement israélien.
L'accord de cessez-le-feu a été établi après plusieurs heures de retard, en partie due à des désaccords sur les listes de prisonniers à libérer. Ce délai a suscité des tensions supplémentaires entre les parties impliquées. Le représentant du ministère de la finance a affirmé que l'occupation militaire était la seule solution viable pour contrôler la bande de Gaza. Il a également menacé de déstabiliser le gouvernement actuel si ses exigences n'étaient pas satisfaites.
Le ministre de la sécurité nationale a également annoncé son retrait de la coalition gouvernementale suite à l'accord de cessez-le-feu. Ces événements ont conduit à une diminution du nombre de sièges parlementaires soutenant le gouvernement. Malgré cela, la coalition au pouvoir maintient encore une majorité relative au sein de l'assemblée législative.
Les conséquences humanitaires de ce conflit sont alarmantes. Les autorités sanitaires locales ont signalé un nombre élevé de décès et de blessés depuis l'escalade du conflit en octobre dernier. Cette situation a attiré l'attention internationale, avec des appels à la responsabilité devant divers tribunaux internationaux. Des mandats d'arrêt ont été émis contre des responsables israéliens pour des crimes de guerre présumés.
Ces développements montrent l'ampleur des défis auxquels est confronté le gouvernement israélien. Ils soulignent également la complexité des relations politiques et diplomatiques dans la région. La poursuite de la stabilité régionale dépendra grandement des actions entreprises par les différentes parties impliquées dans ce conflit.