Moody's: Emerging market debt issuance to remain above pre-pandemic levels in 2021
Published on: Saturday, January 16, 2021
By: Bernama
.jpg "Moody's: Emerging market debt issuance to remain above pre-pandemic levels in 2021")
Kuala Lumpur: Emerging market (EM) debt issuance will soften in 2021 from last year’s record highs, but will remain above the pre-pandemic levels as still-elevated funding needs and improving risk sentiment support overall bond market activity, Moody’s Investors Service said in a report Friday.In its Sector In-Depth report titled ‘Emerging Markets – Global: Quarterly EM Issuance Monitor – January 2021’, it said EM debt issuers brought US$639 billion of eurobonds to market last year.
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The amount exceeded the previous peak set in 2017, breaking the US$600 billion mark for the first time as high-rated issuers secured financing in the wake of the pandemic.
“In 2021, emerging markets volumes are unlikely to eclipse 2020 levels as a pick-up in gross domestic product (GDP) growth and commodity prices support revenue recovery and reduce emergency spending needs.
“However, historically-elevated budget deficits will still require significant funding,” said Moody’s senior vice-president and the report’s author, Rahul Ghosh.
The report also said improving global risk appetite and falling credit spreads would allow more non-investment grade issuers to access markets in the coming year, but noted that risks include a sudden jump in global inflation expectations, coronavirus containment challenges and concerns over rising EM debt burdens.
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