Mayer Brown today announced the release of the Second Edition of the "High-Yield Bonds in Asia: The Complete Issuers' Guide", which includes additional information regarding key covenants, negotiation approaches and the latest trends in high-yield packages for Asia-based issuers.
The Guide is authored by Jason T. Elder, Partner of Mayer Brown LLP, together with Thomas Kollar, Partner of Mayer Brown LLP.
"Since our initial publication of this Guide in 2015, the high-yield market in Asia has continued to evolve and mature. Changes have continued with respect to deal structures and covenant packages designed to suit new issuers and developing markets. We were amazed by the strong client response to the first edition, and recognized that there was a real need for an expanded and updated guide," Mr. Elder said.
While the Asia high-yield bond market has been supported by recent longer periods of lower volatility and more consistent investor demand, one of the criticisms against these bonds is their weakening covenant quality.
Moody's in July reported that the Asia high-yield bond covenant quality reached a record weak level in the second quarter of 2018. High-yield bonds issued by Chinese property developers had the lowest average quality score, while Southeast Asian bonds provided stronger protection, according to Moody's.
"With the publication of this Guide, we attempt to provide existing and new issuers with a tool to help understand and navigate high-yield covenant packages, and better equip themselves to manage their indenture compliance post-issuance," Mr. Elder said.
The Guide covers every aspect of Asia high-yield bond issuance, from negotiating and structuring a covenant package to transaction execution, and their legal considerations.
The Guide also provides a global comparison of high-yield bond covenant packages, as well as takes a closer look at high-yield bonds issued in China and Indonesia. A Chinese language version is planned for publication in August 2018 and a Bahasa Indonesia language version in October 2018.