Emerging market bond sales slump 30 pct in 2015; next year may be lower

viernes 18 de diciembre de 2015 07:54 GYT

By Claire Milhench

LONDON Dec 18 (Reuters) - Emerging markets issued almost a third fewer bonds in hard currency this year as deals from Brazil and Russia dried up, and issuance may fall further in 2016 as U.S. interest rates rise.

Total government and corporate bond sales amounted to $342 billion from 498 deals in the year to Dec. 11, according to Thomson Reuters data. That was down from a record $492 billion in 2014 across 742 deals.

Companies sold the bulk of the bonds, $228 billion worth in 390 transactions. That was down from $364 billion last year. Sovereign borrowing amounted to $113 billion, the data showed, down 11.5 percent from 2014

"The absence of the two largest (issuing) countries changed the market picture this year, especially in the corporate space," said Sergei Strigo, head of emerging market debt at asset manager Amundi, referring to Brazil and Russia.

Western sanctions against Russia have effectively barred its companies from international debt markets. Political and economic turmoil in Brazil has made it harder for companies borrow at attractive rates, and Standard & Poor's downgraded its sovereign debt to junk in September, compounding the problem.

Chinese companies were the biggest source of hard currency issuance, accounting for $100.6 billion of bonds - effectively unchanged from 2014. Mexico was second, with $26.4 billion and South Korea third with $21.4 billion.

A handful of junk-rated frontier economies also sold bonds, forced to market by low commodity prices. Debut issuers in this category were Cameroon and Angola.

However, with the Federal Reserve likely to continue raising U.S. interest rates in 2016, the global cost of borrowing will increase. The Fed put up rates this week for the first time in more than nine years.   Continuación...