Emerging market debt issuance to stay above pre-Covid levels: Moody's

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Emerging market debt issuance to stay above pre-Covid levels: Moody's

london, Jan 14 (IANS) Emerging market (EM) debt issuance will soften in 2021 from last year's record highs but will remain above pre-pandemic levels as still-elevated funding needs and improving risk sentiment support overall bond market activity, Moody's Investors Service said in a report on Thursday.<br /><br /><br />EM debt issuers brought $639 billion of eurobonds to market last year, exceeding the previous peak set in 2017 and breaking the $600 billion mark for the first time, as high-rated issuers secured financing in the wake of the pandemic.<br /><br />"In 2021, emerging markets volumes are unlikely to eclipse 2020 levels as a pick-up in GDP growth and commodity prices supports revenue recovery and reduces emergency spending needs," said Rahul Ghosh, Moody's Senior Vice President and the report's author.<br /><br />"However, historically elevated budget deficits will still require significant funding."<br /><br />Improving global risk appetite and falling credit spreads will allow more non-investment grade issuers to access markets in the coming year. However, risks include a sudden jump in global inflation expectations, coronavirus containment challenges and concerns over rising EM debt burdens.<br /><br />Issuers across larger emerging markets, notably China, have also benefited from strong local market appetite and liquid domestic capital markets to meet their financing needs.<br /><br />.