DEBT: Investors Take Stock

There is still demand out there, though as of mid-February European sovereign debt worries were nudging risk aversion back up.

Of the $8.13 billion in 16 deals done through February 10 three for $3.00 billion were sovereign or quasi-sovereign, according to Dealogic. In the corresponding period of 2009, five of six Latin bonds were government-related, accounting for $6.125 billion of $6.375 billion.

"After last year’s rally in risk assets, markets are taking a breather, and I think investors are now going to be more selective," says Chris Kelly, senior portfolio manager at Fortis Investments, which manages more than $3 billion in EM debt. "For each deal, it’s going to depend on the technicals and how well they price."

He adds that higher 10-year US Treasury yields since last year have driven up all-in...