Junk Nations Risk Muted Future Debt Sales as Liquidity Dies
- High-yield debt sales year to date are the lowest since 2016
- Hawkish Fed could make nations pivot to seek other financing
Shoppers at a local market in San Salvador, El Salvador.
Photographer: Camilo Freedman/BloombergThis article is for subscribers only.
September, historically the busiest month for high-yield sovereign bond sales, is set to disappoint this year as the risk of aggressive US rate hikes keep junk-rated nations on the sidelines.
Banks including Morgan Stanley, JPMorgan Chase & Co. and Goldman Sachs expect subdued external debt sales from emerging countries next month, as borrowing costs at a three-year high and poor liquidity deter riskier nations from tapping the market.