On Tuesday, B/Caa1-rated Ecuador successfully launched its first international bond since its $3.2 billion default in 2008. The transaction raised $2 billion of 10-year funds at a yield of 7.95 percent, which was tighter than expectations for the low-8 percent region. The success came despite the country recently tapping a $400 million loan from Goldman Sachs, borrowing billions from China, and instituting a buyback program on its defaulted debt to pave the way for this issue.
Elsewhere this week, B+/B1-rated Kenya raised $2 billion from international investors in its debut bond issue. The deal was divided into a 5-year bond yielding 5.875 percent and a 10-year yielding 6.875 percent, and was reportedly more than four times oversubscribed.
Investors have reason to be wary of both deals, due to credit worthiness and Argentina-contagion concerns about Ecuador, and recent terrorist activity in Kenya. However, ongoing stimulus efforts by the major central banks of the U.S. Federal Reserve, European Central Bank and the Bank of Japan have kept bond market yields low. This has piqued investors' interest in riskier emerging market and high-yield corporate debt, for which returns are higher.
Read MoreWith yields so low, which bonds should you buy now?