January 14, 2014
High-yield credits are poised for months of turbulence as investors demand more compensation for their risk amid rising borrowing costs and as commodity prices and economic growth moderate across the region.
This comes at a time when fund managers are growing more sensitive to the hazards of investing in emerging market high-yield debt, following last November’s high-profile bankruptcy – the largest in Latin American history – of Brazilian oil firm OGX.
“This case in a relatively short per
OGX’s default, increasing benchmark rates and a turning macroeconomic cycle are set to make borrowing more difficult for sub-investment grade companies this year, say portfolio managers