The more worrying of the two was the $5bn of 10 and 30 year bonds from South Africa, which widened by around 20bp in the few days after pricing.
Many had expected a bond from the country before the end of 2019, but this was nearly double the size predicted. Market conditions were so good that South Africa decided to take more debt, to pre-fund for next year.
Abu Dhabi issued $3bn of five years, $3bn of 10s and a $4bn 30 year.
Though rumours of the deal and its size had been swirling for several weeks, Abu Dhabi had skipped a roadshow, which might have helped prepare the market better for such a large issue.
The reason for haste was that the deal team was worried about a change in market conditions, especially since other supply was expected, bankers working on the transaction said.
Abu Dhabi's bonds have widened about 5bp.
In both cases, investors have laid the blame for the poor performance squarely on oversupply. Some said they would hit pause on buying more deals until the indigestion had eased.
The upshot is that the CEEMEA primary bond market came very close this week to a stumble of its own making.
Other new issues that followed those behemoth trades have traded around par. None has delighted buyers in the secondary market.
Issuers need to be more cautious. Market conditions are excellent, but never indestructible.
At the moment, there seems little reason why this EM rally cannot continue, if issuers and bankers show a modicum of restraint. A turning point will come much sooner if several greedy issuers race each other into the market, printing much bigger deals than expected.
The ball is in the borrowers’ court. They need to be careful not to get so overexcited that they wallop it out.