The ouster of Venezuelan leader Nicolas Maduro drove an outsize rally in the country’s bonds, making the already shrinking universe of deep-distress opportunities in emerging-market debt even smaller.
Sri Lanka and Ghana have seen their dollar bonds rise well out of distressed territory in the past few months, while remaining defaulted notes — such as Venezuela and Lebanon — have already delivered strong gains at the start of 2026. The tighter spreads are making investors more selective and targeting options including in Africa and Ukraine.