Asian dollar bond market defaults tripled to at least nine in 2018 from the previous year, according to Bloomberg-compiled data
Hong Kong: A growing chorus of observers expect debt defaults in Asia will spread as weakening currencies and tighter liquidity leave riskier borrowers with higher refinancing costs. Rising failures add to headwinds that governments have to navigate during a politically fraught 2019, with elections in India and Indonesia. Asian dollar bond market defaults tripled to at least nine in 2018 from the previous year, according to Bloomberg-compiled data.
Edwin Wong, chief investment officer at Hong Kong-headquartered investment firm SSG Capital Management, which invests in distressed debt, sees the biggest opportunities in China and India amid tight liquidity. The US-China trade war is also starting to hit companies, as rising interest rates pressure businesses, according to FTI Consulting, a firm that advises on restructuring. “We are setting up the business on the premise that we will see an increase in defaults in 2019," said John Batchelor, Asia head for corporate finance and restructuring at the firm, adding that the company is looking to increase its headcount in Hong Kong and China. A US government delegation will travel to Beijing in the week of January 7 to hold trade talks with Chinese officials, two people familiar with the matter said.