A return to risk-off investment in mid-April ended inflows to high-yield and emerging market funds. However, bankers and investors report that strong underlying fundamentals will continue to drive offshore issuance from high-yield Latin American credits.

Inflows to high-yield funds had been positive for 18 weeks before the middle of April and emerging market funds had seen 12 consecutive weeks of inflows, according to fixed-income data provider EPFN.

So far in 2012, high-yield issuance makes up 18% of issuance, compared with 24% of total deals in 2011, but this is largely a function of greater volumes from high-grade issuers.

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