If investors buy the Brazilian dollar bonds, yields are around 4% compared to 12.5% for local currency bonds.
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The dollar bonds were sold at three percentage points over the midswap rate, a benchmark, equivalent to a 4.03% yield.
At the same time, issuers command lower coupons on synthetic yuan bonds than dollar bonds, pocketing the difference, though they forego any gains on renminbi appreciation.
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Also, at least half a dozen corporate and sovereign issuers are conducting roadshows of investor presentations for proposed U.S. dollar bonds this week, among them Philippine brewery San Miguel Corp.
Jake Lowery, portfolio manager at ING Investment Management LLC in Atlanta, said he would prefer to participate in euro-denominated sovereign bonds because that debt, but not dollar bonds, could receive the backing of the European Central Bank.
People who remembered 1970, 1974 and 1981 made a lot of money in 1989 and 1990 buying good, interest-paying junk bonds when they were selling at 40, 50, 60 cents on the dollar, bonds that now sell at a premium.
The fund has 40 percent of its fund in Mexican equities or dollar denominated bonds.
He owns their 2016 dollar denominated bonds yielding 10 percent and ADRs listed on the NYSE.
But most of the investors choosing emerging market debt are buying bond funds with local currency debt, rather than buying the sovereign or quasi-sovereign dollar denominated bonds that foreign countries like Brazil also issue.
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The iShares Morningstar Multi-Asset Income Index Fund ( IYLD) is a good choice that has a 4.7% yield and holds ten other income ETFs, invested in things like junk bonds, dollar-denominated emerging market bonds, Treasurys and dividend stocks.
Prices jumped on the bid with the bonds trading up to around 65 cents on the dollar in hope that bonds would be settled at maturity.
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The difference is that the flaky-currency players don't buy dollar-denominated bonds and don't buy longer-term paper.
The country cannot continue borrowing at today's rates: PDVSA's latest dollar-denominated bonds pay a 12.75% coupon.
Daewoo's dollar-denominated bonds are now worth less than half of their face value, according to the firm.
First, it assumes that a dollar invested in stocks should have the same wealth-creating effect as a dollar invested in bonds.
Yields on sovereign debt issued within Indonesia, the Philippines and other Asian countries are significantly higher than yields on dollar-based bonds.
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As investors remain wary of risk involved in equity and commodity assets in the short term, Berkshire Hathaway sage Warren Buffett is in India, where he advised investors to stay out of long-term dollar-bound bonds, according to Bloomberg.
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They sold 6% bonds trading at 50 cents on the dollar and reinvested in different 6% bonds trading at 50 cents.
But in August the dollar-denominated Russian bonds got too cheap to resist and he bought a lot of them.
In 2008, when the credit crisis hit and emerging market currencies weakened against the dollar, emerging market bonds suffered.
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At the height of the boom, for every dollar banks issued in bonds, they might issue twenty dollars in swaps.
Dollar inflows into Brazilian bonds might contract a bit, but foreign direct investment should remain stable as Brazil starts looking a little cheaper.
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Another loophole is used by companies: in a market known as blue-chip swaps, they buy dollar-denominated sovereign bonds in pesos, transferring them to the United States where they sell them for dollars.
Mr Lopes insists that tight monetary policy will slow the capital outflow, because it is no longer profitable to borrow reais to buy dollar-denominated Brazilian bonds, as it was when bond yields soared last month.
Assets under management are split roughly equally between retail and institutional accounts, equities and bonds, and dollar and non-dollar accounts.
The only bonds offered by foreign issuers that Fidelity's brokerage arm will sell you are Yankee bonds--dollar-denominated debt of foreign issuers, which will give you the feel of diversity but little else.
China may very well diversify away from the dollar and even US Treasury bonds, but it is hard to see any major government holder of US dollars going from a 95% dollar position to a 60% position, or even a 50% or lower position anytime soon.
Countries like Brazil could conceivably raise taxes on foreign investors buying local currency bonds to ward off dollar flow and sharp appreciation of the Brazilian real.
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The economic recovery and the topsy-turvy world of government bonds and a weak dollar have at least certainly produced a changing investing landscape in one way over the last year.
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If I believed this to be an accurate analysis, I would be tempted to move every dollar I have into high yield bonds and borrow on a home equity line to buy even more.
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