For quite some time now, we have been writing and warning traders and investors of Emerging market bad debt, especially non-financial corporate sector vulnerability. According to Bank of International Settlements (BIS), as of second quarter 2015, about $4 trillion, Dollar debt is outstanding in emerging market, of which 12 countries account for 70% of the debt.  Read more at http://www.econotimes.com/FED-liftoff-series-%E2%80%93-E-Dollar-trying-to-get-back-home-131992

While some might suggest that with Taper tantrum of 2013 and continued drop in emerging market (EM) currencies since then has done the necessary adjustment, however corporate sector blowout according to us could be much larger than all that.

We have listed in our previous article that EM bad debt is one of the two biggest risks heading into 2016.

Mexico's biggest construction company, ICA's case is a good example, why we are worried over this.

After false promises and several denials, Mexico's ICA has admitted that it will not pay $31 million in interest outstanding to $700 million worth of bonds. Last Friday, on the news, company's share price has plunged 24%.

ICA is only a small example to vast ocean of Dollar debt outstanding. In Mexico, total non-financial corporate debt outstanding as of second quarter this year stands at $259 billion and 66% of that are denominated in Dollar.

Not a good time for Dollar debt, when FED is on hike path and Dollar is in Bull cycle.