A Trio of Downgrades Spell Default Danger for Emerging Markets
- Moody’s downgrades Argentina, Ecuador, Zambia on default risk
- Covid-19 pandemic compounds issues in troubled EMs: Moody’s
People line up a block away from Banco de la Nacion in Buenos Aires, Argentina, on April 3.
Photographer: Sarah Pabst/BloombergThis article is for subscribers only.
The Covid-19 pandemic pushed Moody’s Investors Service to downgrade Argentina, Ecuador and Zambia deeper into junk territory on Friday.
Moody’s warned of escalating default risks in the three developing nations as global coronavirus cases topped 1 million. The combination of stalled trade, low commodity prices and deteriorating growth has sent emerging-market risk premiums soaring. Bonds from Argentina, Ecuador and Zambia have tumbled amid concern the nations may follow Lebanon’s lead in defaulting.