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Emerging Markets

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  • Andrade Gutierrez, the Brazilian construction firm, wrapped up its debt restructuring this week with a well-received bond exchange as Brazilian high yield names keep investors on their toes in the absence of new issuance.
  • Investor concerns over a growing corruption scandal in Argentina brought a new bout of volatility to Latin American bonds this week, with market participants on both the buy-side and sell-side appearing to have written off the prospect of new issuance in September.
  • CEE
    Yields on Turkey’s sovereign debt hit 20% this week, stoking fears of a debt crisis. But breaking the purported psychological importance of the 20% ceiling does not add much to the well-established litany of issues facing the country’s economy.
  • UniCredit’s senior management team had to fend off a barrage of questions about the bank’s exposure to Turkish bank Yapi Kredi this week, as yields spiked on Turkish local currency debt and the lira slid further against the dollar. UniCredit’s equity stake is accounted at €2.5bn, but worth less than €1.2bn in today’s market.
  • A pair of US sanctions against Russia could have potentially disastrous consequences for local and international bond investors, especially if a planned ban against the purchase of new sovereign debt takes effect, writes Lewis McLellan.
  • Emerging market sovereigns are regarded as stalwarts of the credit default swaps (CDS) market. Their liquidity is dependable, and participants can usually trade in large size with relatively low transaction costs and little price impact.