Buyer-Beware Guide to Emerging-Market Debt, From Brazil to China
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As the U.S. prepares to start raising interest rates for the first time in almost a decade, speculation is brewing that emerging-market corporate borrowers could be among the hardest hit.
The concern stems largely from the growth of the market: There's $1.3 trillion worth of developing-nation dollar bonds today. Five years ago, that figure was just $444 billion. With so many new names tapping the market, the argument goes, surely some of them must be suspect. Throw in the weakening of economies across much of Latin America, Asia and Eastern Europe -- slowdowns that will cut into companies' sales and government tax revenue -- and the worries only mount.