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Emerging-Market Bond Issuance Soars

Borrowers in developing nations are flooding markets with a record volume of bonds before reductions in Fed monetary stimulus drive up funding costs.

By Krystof Chamonikolas and Andras Gergely, Bloomberg | Updated on January 16, 2014

International bond sales in emerging markets are up 21 percent, to US$55 billion this month, the busiest start to a year since Bloomberg began tracking the data in 1999. Poland is marketing $2 billion of 2024 bonds today after the European Union’s largest eastern economy raised 2 billion euros ($2.7 billion) last week. Petroleo Brasileiro SA, Latin America’s largest oil producer, has sold the most debt among 108 issuers, with a $5.14 billion offering of euro- and pound-denominated securities.

Companies and governments in developing countries are seeking to pre-empt any rise in borrowing costs that could result from the next round of tapering by the Fed, which decided in December to trim monthly bond purchases by $10 billion to $75 billion. U.S. policy makers next meet January 28 to 29.

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