June 20, 2013
Signs that the US Fed will seeks to begin tapering off
stimulus have led to selloffs for EM assets, and concerns that the days of cheap
borrowing may be over. If the end of cheap debt is combined with commodity
prices coming off historical highs, some LatAm governments could be caught in
the pinch. The restructuring spotlight has firmly been on Europe in recent
years, though it threatens to shift back to EM, including LatAm.
“The strains on EM will begin to appear in the next two
A potential double shock of lower commodity prices and higher borrowing costs in the years ahead threatens the debt outlook for some LatAm sovereigns.