EM basks in risk appetite surge to stave off crisis concerns

By Oliver West, Ross Lancaster
04 Jun 2020

While leading economists fret about a reckoning to come for emerging market debt in the wake of the coronavirus pandemic, for vast swathes of EM issuers bond market business is brisk. Despite dire data and forecasts, dollar funding costs for some sovereigns are nearing pre-crisis levels as investors grasp at any sort of yield. The rally may have further to run, write Ross Lancaster and Oliver West.

Potential fallen angel Colombia (Baa2/BBB-/BBB-) and coronavirus hotspot Brazil (Ba2/BB-/BB-) notched $18bn order books on their return to bond markets this week, with Colombia fetching $2.5bn of long 10 and long 30 year bonds, and Brazil $3.5bn of five and 10 year notes. Both ...

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