By Shamaila Khan
As the coronavirus crisis unfolded, prices tumbled and yields spiked to record highs across investment-grade emerging-market debt ((EMD)) - a sector widely considered to have healthy credit fundamentals and a low risk of defaults.
Yield Gap Widens with US Corporates
Over the past decade, the difference in yields between investment-grade EMD and investment-grade US corporates had narrowed steadily, reflecting converging average credit quality. Then came COVID-19.
The pandemic triggered massive market declines as investors rushed to free up cash. Indiscriminate selling hit some of the highest-quality sectors of the market, including investment-grade