Junk-rated nations sate yield chasers amid low interest rates
Sales follow busiest mid-year for emerging-market bond offerings, with governments and firms raising US$120b in June-August period
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THE lowest borrowing costs in four years are triggering a flurry of bond sales from junk-rated nations. South Africa said on Wednesday it plans to issue dollar bonds, while Turkey has completed a US$1.75 billion tap.
Ukraine is said to be planning a return to international capital markets for the first time since it restructured debt in 2015. Ex-Soviet republic Tajikistan, which has never sold Eurobonds, is also lining up an offering. Bahrain, the only Gulf Cooperation Council (GCC) nation with three junk ratings, has mandated banks for a sukuk issuance.
The sales will follow the busiest mid-year on record for emerging-market (EM) bond offerings, with governments and companies raising more than US$120 billion between June and August. But those deals haven't satiated investor demand for higher yields, as low interest rates across the developed world encourage traders to take on more risk.
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