Emerging-Market Bonds Fall on Concern Over U.S. Bailout Plan

Sept. 26 (Bloomberg) -- Emerging-market bonds fell, led by losses in Venezuela and Russia, after negotiations stalled in the U.S. Congress over a $700 billion financial rescue package.

The extra yield investors demand to own developing-nation debt instead of U.S. Treasuries widened 5 basis points to 3.72 percentage points at 4:23 p.m. in New York, according to JPMorgan Chase & Co. A basis point equals 0.01 percentage point. The so-called spread had earlier widened as much as 10 basis points.

Investors shunned higher-yielding securities as Republicans were divided over the bank bailout plan, putting in danger an agreement hours after a bipartisan group of negotiators and the White House said they were closing in on one.

``The prospects of seeing a plan in the short term are deteriorating by the minute,'' said Luis Costa, an emerging- markets debt strategist at Commerzbank AG in London. ``The stepping stone for a recovery is the Treasury plan.''