Bonds and debt instruments issued by emerging market countries. This tends to be sovereign rather than corporate paper but companies in these markets are able to borrow, from banks and other sources. Sovereign issuance has historically been issued in foreign currency (external debt), either US dollar or euro – these are known as hard currencies, as opposed to local currencies. This is however changing as more local currency issuance is coming to market. EMD tends to have a lower credit rating than the developed markets but this has been changing since the credit crunch and the European sovereign debt crisis.