Emerging market corporate credit quality down but not out

  • 📰 Reuters
  • ⏱ Reading Time:
  • 35 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 17%
  • Publisher: 97%

United States News News

United States United States Latest News,United States United States Headlines

The coronavirus pandemic has had a devastating impact on companies around the world, but in poorer emerging economies where balance sheets and credit ratings were already weak, the damage is looking particularly widespread.

FILE PHOTO: The Pemex logo is seen at its headquarters in Mexico City, Mexico, April 20, 2020. REUTERS/Edgard Garrido/File Photo

“There is virtually no country on the planet that isn’t affected by this COVID crisis,” said partner and credit analyst at fund manager GMO, Carl Ross. “Overall credit quality is going to decline.” April’s downgrade of Mexico’s state oil firm Pemex alone saw nearly $60 billion worth of bonds, representing 6.6% of the EM investment grade market, lowered to speculative grade.

J.P. Morgan analysts reckon another $25 billion of Mexican corporate debt will follow Pemex into junk if the government loses its IG status. With airlines, tourism and manufacturing all reeling around the world, extrapolating the effect globally runs into hundreds of billions of dollars.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 2. in US

United States United States Latest News, United States United States Headlines