S&P: Why we are showing caution on EMD ratings

Emerging market debt (EMD) is now a mainstream asset class and there are many institutional investors who need to increase their allocations. As well as this, some emerging countries have been upgraded to investment grade. Hard currency bonds issued by good quality corporates domiciled in those countries are also entering the mainstream OECD corporate indices. Russian energy giant Gazprom, for example, is a component of some dollar and euro corporate bond indices. Several asset managers have decided in recent years they need to set up or upgrade their emerging market debt capability i...