Question - Sovereign bond - Yield - Price - Conundrum, help needed

MBAinSearch's picture
Rank: Baboon | 100

We have 2 sovereign bonds issued by 2 different countries in the emerging markets space. Both bonds are issued in USD, and have equal maturity. One country has Moody's/S&P credit rating significantly higher than that of the second country. However, the bonds for the country with lower ratings are trading much lower yields (I am talking at 200-250 b.p.).

Can anyone list/suggest any reasons that could be behind such pricing anomaly? Both are plain-vanilla bonds that have no call/put provisions.

I will be very grateful for any input by you guys.

Comments (2)

Jun 27, 2019

bump

Stay curious

Jun 27, 2019
Comment