ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print
Finance

Dollar strength exposes cracks in Asian emerging-market debt

As coronavirus ravages, weak currencies threaten hundreds of billions in bonds

Some $1.4 trillion worth of U.S. dollar-denominated bonds are outstanding from Asian countries, with more than half of that from China, according to Dealogic.    © Reuters

HONG KONG -- The resilient U.S. dollar and the resulting weakness in emerging-market currencies amid the coronavirus pandemic is increasing the risk of default on Asian companies' corporate debt, potentially triggering a wider credit crisis.

About $115 billion in Asian emerging-market debt is set to mature this year and $200 billion next year, according to data from Dealogic. The dollar's 7% climb this month against a basket of currencies and a 243-basis-point blowout in Asia ex-Japan credit spreads could complicate the task of refinancing, and analysts are predicting that some stretched companies will have to seek restructurings with bond holders.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more