INSUBCONTINENT EXCLUSIVE:
London: In the span of just 11 months, China went from having no distressed dollar-denominated corporate bonds to having more than any other
points as of November 6, according to a Bloomberg Barclays index
tracks about 660 dollar notes with a par value of at least $500 million
borrowing costs for emerging-market companies to the highest level in more than two years
The impact of the trade war on the Asian nation has compounded pressure on developing assets, already reeling under the strain of higher US
interest rates and Treasury yields.
Brazil has the second-highest number of distressed bonds, with three in the index
Jamaica and Russia are tied in third place with two securities each
Debt is typically considered under pressure if its spread above the risk-free rate is 1,000 basis points or more.
There are also a growing
number of corporate notes whose spreads are gradually entering the danger zone
This year, there are 12 bonds on the Barclays Bloomberg index whose option-adjusted spreads were between 800 and 999 basis points, up from
two at the end of 2017.
The Bloomberg Barclays gauge of emerging-market corporate bonds rose for a fifth day on Wednesday, cutting the
average yield to 6.38 per cent
The rate had climbed following a low of 4.26 per cent in September 2017.
