EM Sovereign Debt: Restructurings, IMF, Eurobonds — 2026-09-26

Top developments

Argentina: country risk tops 600bps as IMF payment hits reserves

On September 25, JP Morgan's EMBI-based country risk indicator for Argentina rose 5.4% to 609 basis points, breaching the 600-point barrier for the first time in six months; sovereign bonds fell about 1.2%, the S&P Merval lost 1.6%, and official reserves declined roughly $600 million due to the IMF payment. The official dollar hit a record close of AR$1,545.

The same day the government settled an $803 million payment to the IMF. Officials planned to use pesos from the central bank to buy SDRs and then "recover" the dollars via the pending IMF disbursement tied to the current review — a reserve-swap maneuver that underscores how tight Argentina's external accounts remain.

IMF mission reviews Argentina program as bonds extend losses

An IMF technical mission met Central Bank (BCRA) officials this week to review program targets while Argentina repaid an interest maturity it expects to recoup upon Board approval of the pending disbursement. Rising country risk is itself a constraint: it blocks the government's access to financing to refinance upcoming maturities.

Pakistan: IMF fourth-review talks open, $1.2bn payout in play

IMF negotiations on Pakistan's fourth economic review formally began this week, starting with technical meetings with State Bank of Pakistan officials, ahead of policy-level talks in Islamabad. A successful review would unlock up to $1.2 billion under the Extended Fund Facility. The IMF MD has expressed confidence in the program, citing improved fiscal discipline, external buffers and investor confidence.

Fitch warns Nigeria's $5bn total return swap raises debt and liquidity risks

Fitch's special report "Sovereign Total Return Swaps and Repo Transactions: Q&A 2026," published September 14 but still driving coverage this week, warns that Nigeria's proposed $5 billion TRS arrangement raises questions for debt management, foreign-exchange liquidity, and any future restructuring of sovereign obligations — relevant for how such off-balance-sheet instruments could rank against Eurobonds.

Local view

Argentine financial press is uniformly bearish on the week. El Cronista described "strong punishment to Argentine assets," with country risk near 609bps, the Merval down 1.57% and ADRs in the red on Wall Street. Infobae framed the risk spike as driven by adverse local and international factors — slower reserve accumulation and doubts about 2027 financing — and warned it prevents the government from refinancing debt in markets. In Pakistan's Urdu press, coverage of the IMF mission focused on technical discussions with the State Bank on tax targets, power tariffs and circular debt.

Context & numbers

• Argentina country risk: 609bps (up 5.4% on Sept 25), highest in six months, after eight consecutive days of increases to 566bps by Sept 23.
• Argentina IMF payment due Sept 25: ~$803 million; reserves fell ~$600 million on payment day; BCRA bought just $6 million in markets on Sept 23.
• Argentina official dollar: record AR$1,545.
• Pakistan review: up to $1.2 billion conditional on successful fourth review.
• Nigeria: proposed $5 billion TRS under Fitch scrutiny.

On the radar

• Argentina: Executive Board approval of the pending IMF disbursement, which the government counts on to replenish reserves drained by the $803m payment; watch country risk as it probes further above 600bps.
• Pakistan: policy-level IMF talks in Islamabad after technical discussions with SBP; a staff-level agreement on the fourth review (≈$1.2bn) is the near-term catalyst.
• Lebanon: regional press reports Beirut and the IMF are preparing ground for a debt restructuring; IMF projections cited in Arabic media point to a significant economic contraction in 2026 — watch for formalantree steps toward a framework.
• Lebanon public debt was reported at ~$46.3bn, ~139.4% of GDP at end-2025, in the same MEO report — a key number framing any restructuring discussion.