Asia Corporate High-Yield 50
Downgrades Continue, Evergrande Sparks Rise in High-Yield Funding Costs
Downgrades Continue, Upgrades Disappear
Six downgrades occurred in the HY50 portfolio in 3Q21, all in the homebuilding sector, but zero upgrades, after six downgrades and four upgrades in 2Q21. We expect negative actions on the HY50 to continue in 4Q21, with the Chinese real-estate sector facing a number of headwinds.
HY Funding Costs Rise by More than 1%
Indicative funding costs for Asia-Pacific (APAC) speculative-grade corporates rose by more than a full 1% point to 7.5% by end-3Q21 from 6.3% at end-2Q21. Ongoing negative news concerning China Evergrande’s operations and potential default was the major contributor.
Fitch Ratings Introduces Peer Group of 50 Asian High-Yield Corporates
Fitch Ratings has launched a peer group of the top 50 Asian high-yield corporate issuers, and simultaneously released a compendium containing rating rationales, key credit drivers, rating sensitivities, and debt structure diagrams for these 50 names.
