Friday 27 January 2012

Default Risks Could Sour Demand for Emerging Corporate Debt - CNBC

More emerging market companies are likely to default as the world economy slows and Western banks rein in lending, a risk that is unnerving investors who were snapping up their debt just a year ago.

Emerging market corporate bonds were the top pick for yield-hungry funds in early 2011, encouraged by firms' strong balance sheets and relatively buoyant growth in domestic demand for consumer goods and financial services within emerging economies.

As a result, emerging corporate bond issuance reached more than $180 billion last year, just shy of 2010's record levels, according to data compiled by ING.

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