There has been some discussion of the possibility of buyer revulsion eventually reaching the Treasury market as a burgeoning calendar bumps up against demand. But a Financial Times article points out that the issuers most at risk from a big US and advanced economy government bond sales program is emerging economies, with Hungary and Ukraine already in precarious shape and others in considerable peril.
From the Financial Times:
Record volumes of government bonds from the industrialised nations – intended to reverse what could be the worst recession since the Great Depression – threaten to curb access to credit markets by emerging economies.
Analysts warn that emerging market borrowers could be crowded out of the credit markets by $3,000bn of government bonds expected to be issued by the big developed economies in 2009 – three times more than in 2008. The US alone is expected to issue about $2,000bn next year….
Mr [Nick] Chamie [head of emerging markets research at RBC Capital Markets] said: “Governments or companies that are highly rated will still be able to attract buyers, but ….they will have to pay higher interest rates…”
Brazil, Russia, India and China face external debt payments of $205bn, $605bn, $257bn and $2,437bn respectively, but can rely on large foreign exchange reserves to help meet bills.
Argentina has $64bn of external debt due in 2009; Turkey has $36bn falling due, ING says.