Entries by Jerald M. Lanzotti, CFA

    Rare Century Bonds Return to Emerging Markets

    June 9, 2015 10:15 AM by Jerald M. Lanzotti, CFA

    Mexico and now Brazil's Petrobras have both issued 100-year bonds. What is the appeal for the issuer and buyer?

    Would you wait 100 years to get your money back from an investment? Although it is rare, governments and companies sometimes issue bonds that exceed the life expectancy of the average person. In the United States, companies like Coca Cola and Disney and top colleges like the University of Pennsylvania have all planned for a century of anticipated needs with 100-year bond issues.

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    Should Investors Be Wary of Emerging-Market Corporate Debt?

    June 3, 2015 4:50 PM by Jerald M. Lanzotti, CFA

    A strong U.S. dollar and a few high-profile defaults have some EM investors on edge. But we don’t think they present significant problems for the market.  

    Relatively few emerging-market (EM) companies issue hard-currency bonds (that is, bonds issued in other than a local currency). Although a rapidly growing asset class—and, at roughly $1.6 trillion, one rivaling the size of the U.S. high yield bond market—the EM hard-currency bond market is still roughly one-third the size of the local currency debt sector and represents a small percentage of EM gross domestic product (GDP), a little over 8% in Latin America and less than 3% GDP in Asia, according to the Financial Times.

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    Emerging Market Corporate Debt: Taking Stock of a Strong Second Quarter

    July 18, 2014 11:52 AM by Jerald M. Lanzotti, CFA

    Emerging market corporate debt remains one of the last bastions of incremental yield pick-up in the capital markets.  

    Historical experience makes one cautious of over-optimism in the emerging market (EM) economies.  But there was something to celebrate in the second quarter of 2014, as EM corporate debt provided one of the strongest performance stories in the fixed-income asset class,1 outperforming both U.S. high-yield bonds2 and U.S. investment-grade bonds.3  Even more remarkable, this performance occurred during a time of headlined geopolitical risk—typically something that would put a crimp in EM sales of any category. What lay behind the strong relative performance of the period?   

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    Emerging Market Corporate Debt: Two Telling Trends

    April 5, 2014 9:15 AM by Jerald M. Lanzotti, CFA

    Emerging economies continue to outpace their developed peers, while the market for EM corporate debt has expanded.

    As I highlighted in my recent article on lordabbett.com, emerging market economies are growing and becoming a bigger slice of the overall global pie, representing 36% of global gross domestic product (GDP) in the second quarter of 2013, up from only about 20% 10 years ago. Half of global consumption will come from EMs by 2025, according to J.P. Morgan. According to J.P. Morgan, GDP growth be 4.6% in emerging markets for 2013, versus 1.0% in developed markets. But economic growth tells only part of the story.

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