Ratings at risk in emerging markets in 2019
S&P Global warned last week that nearly a third of big bond issuers in emerging markets have an unsustainable amount of debt
London — Credit ratings in the developing world look set to grind lower again in 2019 as the world economy slows, with Latin America likely to be the centre of the action — though the news might not be all bad. The year is already off to a gloomy start, with S&P Global warning last week that nearly a third of big bond issuers in emerging markets now have an unsustainable amount of debt. Ratings matter for sovereign borrowers because the more highly rated they are, the lower their funding costs tend to be. Fitch Ratings thinks there will be more downgrades than upgrades again in 2019 and Moody's Investors Service still has close to twice as many countries on downgrade warnings, at 19, than the 11 it sees as candidates for an upgrade. "Weaker emerging and frontier market countries face the greatest risks," Moody's said, while S&P flagged Argentina, Brazil, Egypt, Lebanon, and Pakistan in its list of those with unsustainable debt piles. Much of it comes down to a mix of overborrowing, ...
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