$100 Billion of Debt From Emerging-Market Nations Is Now Distressed

The bonds of emerging-market nations are entering distressed territory at an alarming rate as the soaring dollar raises the prospect of government defaults, Bloomberg News reported. Fifteen nations with more than $100 billion of Eurobonds outstanding now have average spreads of at least 1,000 basis points over U.S. Treasuries, which many investors consider to be the threshold for debt to be classed as distressed. And that doesn’t even include Lebanon, which defaulted this month, and Argentina, which has begun restructuring talks with bondholders. At the beginning of the year, only Lebanon, Argentina, Zambia and Suriname had spreads of 1,000 basis points. But that was before fears over the coronavirus and the crash in oil prices roiled global markets, sending the dollar into orbit. Ecuador and Zambia are the countries investors appear most concerned about. Read more