More than 20 corporates have acted like fixed-income portfolio managers over the past 12 months, buying back their debt at bargain prices. These include Hutchison Whampoa, Mahindra & Mahindra and Galaxy Entertainment. With corporate bond prices likely to remain low, especially as Asian governments pile on debt to help fund their economic stimulus packages, the buyback trend looks set to accelerate.
"Since the end of last year a lot of borrowers have been considering buying back their debt given how depressed their straight bond and convertible bond prices are," says Terence Chia, a debt syndicate official at Citi in Hong Kong. Bond prices on average were down nine points on Asian high-grade debt over the past year...
