Emerging-market governments and companies almost doubled sales of dollar-denominated bonds in August from a year ago as costs to borrow in the US currency dropped below local yields for the first time since 2008.
Belarus, Venezuela and companies from Petroleos Mexicanos to Union Bank of India sold $12.l billion of bonds last month, up from $7.4 billion in August 2009. Issuance jumped as yields on developing-nation dollar debt reached a record low 5.5 per cent on August 23, according to JPMorgan Chase & Co’s EMBI Global Diversified Sovereign Yield index. Dollar bond yields slipped below local notes for the first time in two years on August 2, when US currency bonds yielded an average 5.9 per cent versus six per cent for local debt, JPMorgan indices show.
Funds are snapping up the offerings as the International Monetary Fund estimates developing-nation economies will grow 6.8 per cent this year.