The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

What lies beneath Asia’s high-yield iceberg

Asia’s high-yield market has taken off, driven by unprecedented demand from investors. Public deal structures are becoming increasingly aggressive and private deals are beginning to leak into the public markets, giving cause for concern. Chris Leahy reports.

asianhy-iceberg.gif

FOR YEARS, ASIA’S high-yield debt market has been a nearly market, offering early promise only to fade later in the investment cycle. Last year all that changed. According to JPMorgan, Asian high-yield issues returned 11.45% in 2006, comfortably beating 10-year US treasury bills and investment-grade corporate and emerging market bonds. New issuance from Asia excluding Japan and Australia hit a record $7.7 billion (see chart), fuelled by foreign investment flows into the region and ample local liquidity. The market’s performance was all the more impressive since it withstood some stiff challenges, including a nuclear test by North Korea, a coup in Thailand and the bankruptcy of Chinese high-yield borrower Ocean Grand.

This year is already promising even more than 2006. Credit conditions remain benign and the perceived global credit default risk, which JPMorgan calculates at just 2%, remains low. Add to that the positive outlook for economic growth in Asia and increased allocation to Asian credits among international institutional investors, and it is not surprising that bankers are bullish.

Asia ex-Japan/Australia high-yield market

New issue volume since 2001

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree