KUALA LUMPUR, Sept 2 — The steady rise in rated high-yield companies and issuance amount in Asia signals strong investor interest across a wide range of companies, said Moody’s Investors Service in a new report.
Senior vice president Annalisa Di Chiara said a sustained flow of new issuers in this region pointed to a deep and broad issuer base interested in tapping the US dollar debt market.
“We assigned nearly 240 first-time public high-yield ratings since 2010. Cumulative issuance from over 750 deals totalled nearly US$260 billion (US$1=RM4.16), steeply increasing rated debt to US$135 billion as of the end of June 2021 from US$30 billion as of the end of 2010,” she said in a statement today.
Di Chiara said Chinese property companies accounted for 67 per cent (US$172 billion) of cumulative issuance from rated Asian high-yield companies since 2010.
In addition, she said, there was a degree of issuer concentration in Asian high-yield bonds.
“Not only does China’s property sector dominate the number of rated companies and amount of rated issuance, but 10 of the larger Chinese developers accounted for around 35 per cent (US$95 billion) of issuance over the past decade,” Di Chiara said.
In terms of average weighted coupons and tenors, total bonds issued over the past decade by B-rated South and Southeast Asian companies came in at around 8.5 per cent and 5.0 years, respectively, Moody’s said.
“This compares with around 10 per cent and 4.0 years for bonds by B-rated Chinese property developers.
“Higher coupons coupled with shorter tenors for the low B-rated Chinese developers bonds signal growing investor demand for higher returns and shorter lending periods for riskier bonds,” the credit rating agency said. — Bernama
