Bond Markets Reopen for Emerging Market Borrowers

Emerging economies, including Brazil and Turkey, are returning to the international bond markets to refinance debt as low-cost global credit becomes available. “At the start of the year, emerging markets were gripped by a negative feedback loop as concerns about slowing growth left investors unwilling to lend and lack of lending reinforced concerns about growth,” reports Elaine Moore for Financial Times. “However, the recent rebound in oil prices and action by central banks in Japan and Europe to further ease monetary policy has led to a resurgence in borrowing by emerging markets.” Credit analysts anticipate that this year could set records for emerging market sovereign debt issuance, she reports, although such opinions defy expectations from the start of the year when the rising US dollar and falling oil prices eliminated demand for such emerging market bonds. Most expect a year of ongoing volatility. – YaleGlobal