Bond issuance by emerging-market governments has reached its highest levels since records started being kept in 1962. The surge was spurred by increased investor appetite for risk, prompting many to shift to securities with more attractive yields. "From an investor's point of view, it does make sense to buy emerging-market bonds because there is a safety net," said Shahin Vallee, an emerging-market strategist at BNP Paribas. "Since the [Group of 20] committed extra money to the International Monetary Fund in April, it has become clear that the governments will not let an emerging-market country default."

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