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Asian companies face increased risk of default as politicians in the region accept more corporate failures, adding to strains as refinancing costs climb.
China is allowing more defaults to happen as it promotes more market-driven pricing in bond markets, while India’s overhaul of its bankruptcy courts is forcing large delinquent borrowers into the courts. JPMorgan Chase & Co. has revised its default-rate forecast for Asian high-yield bonds to 2.8 percent, citing negative surprises such as China Energy Reserve & Chemicals Group Co.’s recent debt failure.
“It certainly looks like defaults will pick up in Asia,” said David Kidd, a partner at Linklaters,
