Private Credit Growth Influences Transition in Asia's Speculative-Grade Markets

Tuesday, 19 March 2024, 06:38

The Asian speculative-grade bond market is witnessing a decline, primarily due to defaults by Chinese developers. Issuance plummeted significantly over the past two years, leading to a transition in the market dynamics. Notably, the rise of private credit is reshaping investor perceptions and fueling interest in local-currency bonds, U.S.-dollar bonds, and non-traditional debt instruments in both Asia and the U.S.

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Asia's Speculative-Grade Bond Market Dynamics:

Many Chinese developers have defaulted, causing a sharp decline in bond issuance.

Issuance fell by nearly 90% in 2022 and an additional 40% in the following year.

Transition to Private Credit:

S&P Global Ratings notes a market shift towards private credit expansion as local-currency bond markets gain traction.

This shift has necessitated investors to rethink their approaches to Asian speculative-grade markets by considering various debt instruments.

Local-currency bonds
U.S.-dollar bonds
Private credit

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.

Asia's Speculative-Grade Bond Market Dynamics:

Transition to Private Credit:

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