China offers the most attractive distressed opportunities in the Asia-Pacific region over the next 12 months, followed by Japan and India, as investors seek to invest amid global uncertainties, says a report.
According to Debtwire's Asia-Pacific Distressed Debt & Special Situations Market Update, produced in association with PwC and ReedSmith, investors are planning to allocate more or the same amount of capital to the region's distressed debt.
Distressed debt opportunities are those in which investors buy assets at bargain prices.
"As the world reckons with the results of the US presidential election, and while Brexit negotiations remain hanging in the air, there have been speculations of realignments in political and trade relations involving Europe and the US, prompting investors to sharpen their focus on markets in the Asia-Pacific region," the report said.
Financial services, oil and gas, and energy are some of the largest sectors where there is distressed debt at the moment, and respondents are also bullish about their prospects in such areas.
The report, based on the opinions of 60 private equity investors, prop desk traders, hedge fund managers, credit risk or workout managers, and emerging market investors in the Asia-Pacific region, noted that in the next 12 months, 88 per cent of respondents plan to allocate more or the same amount of capital to Asia-Pacific distressed debt opportunities.
"Volatility and uncertainty remain the watchwords of the year to come, both in economic and geopolitical terms, and it is up to the shrewd investor to know when to strike while the iron is hot," Luc Mongeon, Managing Editor of Debtwire Asia-Pacific, in the foreword of the report, said.
The survey noted that the greatest impediments to restructuring efforts include unfavourable bankruptcy laws, followed by the lender's own capital issues (33 per cent) and debtor delay due to legal and regulatory permissions.
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