Everyone who covers emerging markets has heard the mantra: Yes, there's a lot of debt but, unlike the late 1990s, sovereign balance sheets are fine. Corporations are the ones to worry about, and they are hardly ever sources of systemic risk.
That may have been true five years ago. It isn't any longer, if the companies that specialize in assessing credit strength are to be believed. Fitch Ratings, Moody's Investors Service and S&P Global Ratings have taken 3.1 times as many negative actions as positive on sovereign and government-related bonds from emerging markets this year. The last time the ratio was this high was in 1998, in the middle of the Asian financial crisis.