Developing countries are finding themselves in market situations that are leaving them high and dry. With the historic low yields for options to sell international bonds as seen in the first half of 2013, many countries are in a bind as borrowing costs rise.

Many emerging market borrowers sold an estimated US$200 billion in bonds between the months of January to July, which is a record breaking streak.

Head of Eastern Europe, Middle East and Africa (EEMEA) Debt capital Markets for Credit Suisse, Chris Tuffey said, "In March/April, some valuations were very high - investors were awash with liquidity and were desperate for higher-yielding instruments. Prices got to levels driven by technical's rather than fundamentals."

Due to the indication of the US Federal Reserve that they will turn off the liquidity taps, this further depressed the interest rates in the West. This further fuelled the demand for higher-yielding assets which in turn burst the bubble that developed more emerging debt.

According to Thomson Reuters data, Insurance feel dramatically when only 25 bonds were issued last month compared to the 82 that were issued in May and the 66 issued bonds for June of 2012.