Perils of debt: Why businesses in emerging markets must tread with caution

A lot of the obligations are denominated in dollars, which makes them harder to pay off when emerging-market currencies depreciate

Investors are getting worried about emerging markets again, and they have at least one good reason: Companies there are more indebted than they were ahead of the last big meltdown a couple decades ago.

A lot has changed since the late 1990s, when a period of credit-fueled growth ended in a wave of defaults and devaluations that swept from Asia through Russia and all the way to Latin America. Governments have built up big reserves to fend off attacks on their currencies, and they aren’t trying to prop up fixed exchange rates like they did back then.

But one lesson seems to