Volatility Fears Spur $28 Billion Emerging-Market Debt Spree

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Bloomberg Nouvelles

Emerging Market,Primary Markets,Dollar Bonds

(Bloomberg) -- Borrowers in the developing world are shoring up their defenses against volatility that could shake their biggest markets in the US and derail...

-- Borrowers in the developing world are shoring up their defenses against volatility that could shake their biggest markets in the US and derail refinancing plans.In just the first five days of the month, they’ve sold more bonds than at the outset of any previous September. Issuance by governments and companies hit $28 billion through Friday, according to data compiled by Bloomberg. In the same period last year $12 billion of deals were closed.

As they frontload borrowing plans, investors have been ready to oblige them before interest rate cuts reduce yields even more. Abu Dhabi National Oil Co., Indonesia and Uruguay headlined the week’s deals. “Issuers will be mindful of US elections around the corner, and the risk that if US growth concerns mount, spreads could move sharply wider,” said Carmen Altenkirch, an analyst at Aviva Investors. “Early August was a reminder to all just how fickle the market can be.”

“This is an environment where you want to tap the investor base that that offers you the sponsorship, the liquidity,” said Trang Nguyen, global head of emerging-market credit strategy at BNP Paribas. “That’s what a dollar bond issue does for you.”China will announce a set of data — consumer prices, industrial output, retail sales and credit growth.

 

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