Furthermore, issuance for January-September was $8.0 billion, well below $13.3 billion a year ago.
"In particular, Chinese property issuance -- a major contributor to the high-yield market -- has slowed in 2015 due to the relatively small volume of maturing bonds, the opening up of alternative onshore funding channels, and the adverse impact on investor confidence of Kaisa Group Holdings's (rating withdrawn) default early in the year," says Brian Grieser, a Moody's Vice President and Senior Analyst.
"The slowing growth in China's economy and the potential for an interest-rate increase by the Federal Reserve are also weighing on demand for Asian high yield bonds," adds Grieser.
Offshore issuance by Chinese property developers totaled just $6.0 for January-September, compared with the $9.6 billion raised in the same period in 2014.
The report also highlights that the trailing 12-month high-yield default rate for Asian non-financial corporates stood at 3.6% at end-July 2015; a slight fall from the 3.9% at end-2014. In the seven months between January and July 2015, three issuers defaulted: two Chinese firms and one Indonesian company.
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Further, this quarter's issue of Moody's newsletter also highlights research focusing on rated issuers exposures to foreign currency debts. Moody's notes that most non-property and property rated Chinese companies with debt denominated in foreign currencies have the financial cushion to withstand a hypothetical 10% depreciation of the renminbi against those currencies, all else being equal, in two separate reports.
The new Moody's report also focuses on Indonesian property developers' noting that credit profiles will deteriorate on the rupiah's sharp fall but that healthy liquidity levels are expected to offset rupiah weakness.
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