Distressed Debt Anxiety Is Spreading Across Emerging Markets
- 21 emerging-market countries trade at or near distressed
- Restructuring talks see more snags as capital access dries up
The Merkato area of Addis Ababa. Kenya.
Photographer: Amanuel Sileshi/BloombergThis article is for subscribers only.
Rapidly rising Treasury yields have brought back fears of a potential wave of defaults across emerging markets, with investors questioning which countries struggling with heavy debt loads will miss payments or be forced to restructure first.
A total of 21 emerging-market nations have sovereign dollar debt trading near distressed levels, as measured by their sovereign dollar bonds trading around a 1,000 basis-point premium to Treasuries, according to data compiled by Bloomberg. The number could go up this week as the weekend attacks in Israel, with its potential to spark conflicts across the the region, could undermine risk appetite further.