EMERGING market debt volumes have reached a record US$320.9 billion so far this year and Credit Suisse launched a corporate bond index for the regional hot spots.

    Issuance has reached the highest year to date volume on record, rising 24 percent from the same period last year, according to Dealogic, the investment banking research provider.

    Average deal size has also increased by one-third from last year to US$125.2 million.

    Max Volkov, director in Latin American debt capital markets at Merrill Lynch, said: “Emerging markets have emerged as a distinct asset class. Investors are looking at the asset class as insulated from the volatility in the rest of the market although they are becoming more cautious.”

    In March, Petroleos de Venezuela, the Venezuelan state-owned petroleum company, issued a US$7.5 billion high-yield bond in the largest debt offering from the emerging markets on record, according to Dealogic.

    Petroleos Mexicanos, Mexico’s state oil company, sold US$1.5 billion last week in 10-year notes and added US$500 million to an existing 30-year bond issue. Credit Suisse, Deutsche Bank and Merrill Lynch were joint bookrunners for the Pemex sale, which was used to fund a tender offer.

    There was more than US$4 billion of demand for the 10-year notes and more than US$1.5 billion for the 30-year paper according to market sources.

    U.S. dollar-denominated debt accounts for more than one-third of all emerging market debt volume this year, hitting US$116.5 billion, with corporate bond issuance reaching US$241 billion, nearly three-quarters of the total.

    Credit Suisse is introducing an emerging market corporate bond index which is exclusively for U.S. dollar-denominated fixed income issues from Latin America, Eastern Europe and Asia. The new index currently includes the U.S. dollar-denominated corporate bonds of 366 issuers with a market value of US$275 billion.

    “Our clients are increasingly pursuing opportunities in emerging markets worldwide,” said Jamie Nicholson-Leener, head of Latin America corporate credit research at Credit Suisse.

    Polina Kurdyavko, an emerging market credit portfolio manager at BlueBay, said there was demand for an emerging market diversified corporate index that could be used by long-only fund managers.

    (SD-Agencies)