New Emerging-Market Woes

One of the last havens in emerging markets is showing signs of strain.  Companies in emerging markets issued trillions of dollars of foreign-currency bonds during the decade long commodity boom, and took advantage of low interest rates in the developed world following the 2008 financial crisis. Now, many investors fear the commodity bust will lead to a rise in defaults that could deepen economic slumps in many of these nations.  Until a few months ago, emerging-market corporate bonds were regarded as a haven amid the routs that had hit stocks and currencies in many developing countries because the bonds are typically issued in the U.S. dollar and by companies with robust growth and credit profiles.

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