Market Vectors’ Francis Rodilosso Comments On Outlook For Emerging Markets Corporate Bond Default Rates
Market Vectors high-yield debt portfolio manager Fran Rodilosso, today commented on defaults among emerging markets corporate bond issuers.
“While defaults among corporate emerging market bond issuers ticked up in the first quarter of 2012, many of them, particularly in Asia, were anticipated”
“While defaults among corporate emerging market bond issuers ticked up in the first quarter of 2012, many of them, particularly in Asia, were anticipated,” said Rodilosso. “All in all, we see credit metrics across sectors and regions remaining relatively stable.”
Rodilosso pointed out that of this year’s defaults occurring in emerging markets regions, few resulted from tightening credit conditions overall. He pointed to the example of Centrais Eletricas do Para (Celpa) in Brazil, where Brazilian banks did pull their credit lines but for reasons specific to Celpa’s situation, not for larger reasons emblematic of problems with the system in Brazil itself.
“Although, in my opinion, we may be closer to the top of the credit cycle than the bottom,” continued Rodilosso, “balance sheets for issuers in emerging markets are still relatively healthy and liquidity is still readily available. Of course, some companies are to be avoided due to balance sheet and management issues, but we see no indication that systemic issues caused rising default rates.”
Mr. Rodilosso joined the Market Vectors team earlier this year bringing with him more than 20 years senior-level experience in emerging market, high yield debt research and portfolio management.
Mr. Rodilosso currently manages two Market Vectors high yield-corporate bond ETFs, Fallen Angel High Yield Bond ETF (NYSEArca:ANGL) and International High Yield Bond ETF (NYSEArca:IHY).
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Market Vectors exchange-traded products have been offered since 2006 and span many asset classes, including equities, fixed income (municipal and international bonds) and currency markets. The Market Vectors family currently totals $25.1 billion in assets under management, making it the fifth largest ETP family in the U.S. and eighth largest worldwide as of March 31, 2012.
Market Vectors ETFs are distributed by Van Eck Global. Founded in 1955, Van Eck Global was among the first U.S. money managers helping investors achieve greater diversification through global investing. Today, the firm continues this tradition by offering innovative, actively managed investment choices in hard assets, emerging markets, precious metals including gold, and other alternative asset classes. Van Eck Global has offices around the world and manages approximately $34.8 billion in investor assets as of March 31, 2012.
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