Capital Markets, Regional Asia, Research & Consultancy - Monday, December 21, 2009 14:35 - 0 Comments

IFR Asia: Southeast Asia debt capital markets guide – region

IFR Asia Southeast Asia debt capital markets – region

December 2009

If Asia came through the global financial crisis in better shape than it did the Asian financial crisis a decade earlier, one of the most crucial differences was the strength of local currency bond markets. In 1997, borrowers were over-exposed to the dollar, so when their currencies declined in value, their ability to service debt or to borrow again was badly damaged, often fatally. This time, the closure of G3 funding sources barely made a difference to southeast Asian borrowers: they just went local.

Jan Wipplinger, co-head of risk syndicate at Deutsche Bank, thinks the point was proven in the week when Lehman Brothers defaulted and Merrill Lynch was taken over by Bank of America. That same week, Deutsche, Aseambankers and HSBC led a deal for Maybank, a M$1.1 billion issue of tier one debt. “During the height of the crisis internationally, for a bank borrower to be able to go ahead with a tier one transaction shows how resilient the local markets were,” says Wipplinger. “They were somehow isolated from the crisis in the international markets, while local investors at the same time turned to the local borrowers they understood.” Continue…

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