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Try Sovereign Analyst — Composite Track

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A B-rated African sovereign issues a 10-year USD eurobond at a 9.5% coupon. The matched-maturity US Treasury yield is 4.5%. The credit spread of 500 bps compensates the buyer primarily for:

Expected loss onlyExpected loss + unexpected-loss risk premium + liquidity premium — with risk premium and liquidity typically dominating in stressCurrency risk onlyInflation differential