Uzbek borrowers have stayed away from international markets this year, whether bonds or loans. Such extended absences are not unusual in emerging markets, but any return must be handled with care.
Uzbek dollar and euro bond issuance had surpassed $1bn a year since they first appeared in the market in 2019, aside from 2022 when nothing came.
This year volumes have slumped again, with Aloqabank’s $300m senior note the only trade to date. The picture is similar in the syndicated loan market, with just one loan worth $60m coming from Asakabank, according to Dealogic data.
Uzbek issuance has always been popular with investors, and more Uzbek banks and companies were planning debut trades. And Uzbek issuance will almost certainly return, just like it did after 2022, when no Uzbek issuers came to the dollar or euro primary bond markets for 20 months between the end of 2021 and the summer of 2023.
And when Uzbek borrowers return to the market, they must handle it with care. Investors will be keen to buy again — scarcity drives demand, particularly for a jurisdiction that had previously proven so popular.
Uzbek issuance has been well managed in the last few years. The country drip feeds investors, spacing out issuance to avoid traffic and indigestion.
But demand will likely be very strong when they do return, and the temptation will be there for Uzbek issuers to rush into the market in short succession. FOMO could drive a deluge.
This would be a mistake because it would not take long to oversaturate investors.
Turkey is one example to avoid following. Its banks and corporates stayed out of the bond market in 2022 and 2023, but returned in force in 2024. Early deals went well as they tapped an investor base starved of Turkish bank and corporate issuance.
But fatigue appeared and deals began to struggle, particularly for those smaller and less well known borrowers that had to wait until after the bigger fish had issued.
Investors would likely welcome Uzbek issuance back with open arms but slow and steady issuance, which Uzbekistan has done in the past, would be wise. A stampede would do no good.