Asian debt defaults likely to rise on shadow banking crackdown, rate hikes

China, India cited as main spots to watch for more nonpayments

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.

In India, a landmark default by shadow lender Infrastructure Leasing & Financial Services Ltd. has tightened liquidity for non-bank lenders, while China’s deleveraging campaign and push to cut the number of zombie companies have prompted more