Over the past three decades, global interest in emerging markets has soared, and when the financial crisis of 2008 hit, emerging markets were largely thought to be the next engine of global growth.
Insofar as they have complied with this investor aspiration over the past few decades, they have also adopted a negative aspect of the developed economies to which they aspired: corporate leverage. As the corporate emerging giants of the developing world have grown, so too have they issued debt at disproportionately faster rates.
Emerging markets are now saddled with more debt than ever before, but in particular, the debt assumed by the largest corporations in emerging markets has swelled to unforeseen levels.
This isn’t a trivial issue in global finance: in 2014 corporate emerging market bonds as an asset class represented more than $1.6 trillion.
