EM bond defaults

plane2012, as beyondbrics readers know, was a record year for emerging markets bonds. But it turns out it was also a record year for defaults.

According to a new report out from Standard & Poor’s, defaults among EM corporate issuers accounted for about 30 per cent of global corporate defaults by issuer count – the highest in the 16 years since the rating agency started keeping scores. Continue reading »

Gramercy, the $3.2bn emerging markets hedge fund, has joined a growing chorus of critics who think the current emerging markets debt boom could soon turn to bust.

And it is putting its money where its mouth is – with the launch of a distressed debt fund that has already attracted $200m in commitments. Continue reading »

Readers of beyondbrics know that emerging markets bonds are hot properties at the moment. Investors are flocking to them for their attractive yields and EM companies and governments, emboldened by the demand, have been happy to oblige, issuing a record $360bn in hard-currency bonds so far this year.

But every bond issued adds to the money that must be repaid somewhere down the line. For David Spegel, head of emerging markets strategy at ING, 2014 could be a crunch year for EM bond refinancing – particularly of speculative-grade bonds. Continue reading »