EM bonds: hold those obituaries | beyondbrics

EM bonds: hold those obituaries | beyondbrics:

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To paraphrase that famous quote from Mark Twain, the reports of the death of investor interest in emerging market bonds appear to have been greatly exaggerated.

For proof, look no look further than the spate of issues so far this month. On Wednesday, Bahrain successfully sold $1.5bn of bonds, joining Indonesia, Nigeria and Mexico’s Pemex in tapping the market following June’s market rout.

Bahrain, which has been rattled by widespread unrest since the Arab Spring, is one of the only countries in the Gulf forecast to run a fiscal deficit this year. Despite this, and the move by Moody’s last month to put the country on review for a possible downgrade, Bahrain was able to sell $1.5bn of 10-year notes at a yield of 6.2 per cent. That’s only a hair higher than the 6.143 per cent it paid for its $1.5bn issue last year."

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