Outlook 2018: is Asia's debt burden too heavy?

After 2017’s record issuance, issuers and investors wonder whether the market will be able to support even more borrowing in 2018 without spreads widening.

It has been a barnstorming year for Asian issuers across the credit spectrum. Throughout 2017, conditions have remained benign, facilitating record-breaking issuance particularly in high yield bonds.

No one expected 2017 to pan out that way. At the beginning of the year, all eyes were on rising US interest rates and geopolitical risks in the wake of Brexit and Donald Trump’s election as US president. 

Instead, European elections failed to create much drama and central banks held off raising interest rates, as inflation remained subdued. Money continued pouring into emerging market funds, enabling Asian borrowers to carry on raising cheap money, with spreads tightening to historically...

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