Emerging Market Bonds Tumble

Emerging market bonds declined in anticipation that General Motors and Ford Motor will be cut to junk, overwhelming the market for high-yield, high-risk securities. Should both companies lose their investment-grade credit ratings, they would add $80 billion to high-yield markets. The increase may force yields higher on other junk bonds as investors seek compensation for increased risk. Brazil’s benchmark bond due in 2040 was down $2.25 Thursday to $112.1, pushing its yield up to 9.77 percent.