With a vibrancy and diversity consistent with its many constituent countries and cultures, the Asian high-yield debt market has expanded dramatically since the Asian financial crisis of the late 1990s. Credit Investors in search of yield have gravitated toward the Asian high-yield market and issuance volumes have surged to record levels. In addition to the deeper investor interest, increased stability of after-issuance trading markets and the emergence of numerous repeat issuers, we have observed expansion into new business sectors, and even countries, as the markets have matured and has continued to deepen.
Since 2013, when we published the previous edition of our Guide, the high-yield market in Asia has evolved with changes to structures and covenant packages designed to suit new issuers and developing markets, and to address the challenges faced by global macroeconomic factors. In addition, recent cross-border defaults by PRC-based issuers and increased volatility caused, in part, by concerns regarding to PRC's economic performance may well reshape investor expectations (and crystallise some of the structural risks discussed in this publication).
This Guide addresses the core elements of high-yield debt and aims to provide existing and new issuers with a reference tool to help understand and navigate high-yield covenant packages, structures and deal execution in Asia.