Bankers cash-in on high-yield bonds

Asian high-yield bond supply has had a healthy start to the year, launching four deals in the first week – a trend that could continue as financial institutions look to bank such profitable transactions.

The high-yield sector in Asia has made a healthy start to the year, following a strong 2013, with investment banks eager to increase their market share in one of the more profitable areas as cost of credit rises.

With Basel III requirements putting increased pressure on bank capital, this trend has taken on added importance due to the fact that profitability in the investment grade space has declined. One of the main causes is that the number of bookrunners has mushroomed per transaction in recent years, thus reducing the share of the fees.

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