Moody's: Asian high-yield market shows record issuance; refinancing risk is manageable

The US-based ratings agency, Moody’s Investors Service, published its latest "Asian High-Yield Interest Chartbook", highlighting the following:

Moody's Investors Service says that the Asian high-yield bond market has shown a record level of issuance for January-September 2017 while refinancing risk is manageable and the default rate for all of the year will remain low.

Annalisa DiChiara, a Moody's Vice President, and Senior Credit Officer, noted: "A total of USD9.1 billion was issued in Q3, raising issuance through end-September to USD30.7 billion, a record high level for the first nine months of the year. Investor tolerance for low credit quality and issuers' refinancing needs continued to drive issuance in the Asian high-yield market."

"Although the number of B3 rated companies and below fell to 15.4% on 30 September 2017 from 17.8% at 30 June, as the number of corporate family ratings (CFRs) climbed to 143 from 129 in this period, with a majority of new ratings assigned CFRs at B1 or below," DiChiara added.

The report says that refinancing risks remain manageable as, absent any exogenous shocks, the market has the capacity to absorb upcoming maturities.