KUALA LUMPUR: Moody's Investors Service forecasts that the issuance of high-yield bonds from Asia ex-Japan will be strong in 2011, with the potential for a record year, after a bumper year in 2010.
The ratings agency's vice president-senior credit officer Laura Acres said deals amounted to $13.7 billion closed in 2010, which was nearly four times higher than in 2008 and 2009.
Acres, who is the author of the report, said: "And growth looks set to continue in 2011; in January alone we saw $3.1 billion in rated deals price and close, many of which were significantly over-subscribed."
Moody's expects benign credit conditions to continue, with real gross domestic product (GDP) forecast to grow by 7.1% for Asia ex-Japan in 2011.
Around $2.9 billion in bonds will fall due this year, but given the growth trajectory for Asia's high-yield market, refinancing will be manageable, in Moody's view.
The ratings agency said macro-economic conditions have resulted in stronger credit profiles, as evidenced by higher cash holdings, and stronger financial metrics. Moody's thus sees no material refinancing risk for high-yield corporates over the next 12 months.
Moody's said with more names coming to market, the rated universe continues to expand. Given Asian corporates' sound liquidity levels and the significant amount of funding available from increasingly less-risk-averse investors, many high-yield names are finding opportunities to lock in long-term funds at rather attractive rates -- and without the more stringent limitations frequently imposed by banks through maintenance covenants.
'Finally, positive rating actions on many of the region's sovereigns, in particular, Indonesia (Ba1/stable), China (Aa3/positive), and the Philippines (Ba3/positive), have helped increase the level of comfort with those nations and hence the overall credit universe, as evidenced by the increasing number of US and European investors in Asian paper, although the investor base remains heavily weighted regionally,' it said.
The ratings agency's vice president-senior credit officer Laura Acres said deals amounted to $13.7 billion closed in 2010, which was nearly four times higher than in 2008 and 2009.
Acres, who is the author of the report, said: "And growth looks set to continue in 2011; in January alone we saw $3.1 billion in rated deals price and close, many of which were significantly over-subscribed."
Moody's expects benign credit conditions to continue, with real gross domestic product (GDP) forecast to grow by 7.1% for Asia ex-Japan in 2011.
Around $2.9 billion in bonds will fall due this year, but given the growth trajectory for Asia's high-yield market, refinancing will be manageable, in Moody's view.
The ratings agency said macro-economic conditions have resulted in stronger credit profiles, as evidenced by higher cash holdings, and stronger financial metrics. Moody's thus sees no material refinancing risk for high-yield corporates over the next 12 months.
Moody's said with more names coming to market, the rated universe continues to expand. Given Asian corporates' sound liquidity levels and the significant amount of funding available from increasingly less-risk-averse investors, many high-yield names are finding opportunities to lock in long-term funds at rather attractive rates -- and without the more stringent limitations frequently imposed by banks through maintenance covenants.
'Finally, positive rating actions on many of the region's sovereigns, in particular, Indonesia (Ba1/stable), China (Aa3/positive), and the Philippines (Ba3/positive), have helped increase the level of comfort with those nations and hence the overall credit universe, as evidenced by the increasing number of US and European investors in Asian paper, although the investor base remains heavily weighted regionally,' it said.
No comments:
Post a Comment