African Defaults Cripple Emerging Markets Debt Market

As markets rally off the back of improving economic data from Europe and the United States, problems are brewing in emerging markets, which no longer appear to be the go to growth markets for investors.

Emerging market investor sentiment reached its peak in 2013 when Mozambique issued its now infamous “tuna bond.” Maturing in 2023 the bonds were initially billed as being for the development of a fishing company, but several years later it emerged the proceeds had been used for naval vessels and other security equipment. At the beginning of last month, the country became the first African nation to default on dollar bonds since Ivory Coast in 2011. Mozambique had been given a 15 day grace period...