Southeast Asian debts go into tailspin<\/p>\n
HONG KONG (Reuter): The last time Southeast Asia experienced a
\ncurrency crisis, its debt markets went into a tailspin, caused by
\nthe retreat of U.S. investors.<\/p>\n
That was then. This is now.<\/p>\n
While some Asian issuers are sidelined, for others it is
\nbusiness as usual.<\/p>\n
\"You can't tar everything with the same brush,\" the vice
\npresident of a U.S. investment bank told Reuters.<\/p>\n
Speculators have recently attacked the currencies of the
\nPhilippines, Indonesia and Malaysia and forced Thailand to float
\nthe baht, but those developments failed to wreak the havoc that
\nin early 1995 followed the Mexican peso crisis.<\/p>\n
After the January 1995 attack on Asian currencies, spreads on
\nAsian debt paper soared to reflect what investors perceived as
\nhigher risk.<\/p>\n
In one case, an issuer saw the spread on its 10-year paper
\nrise from 270 basis points over comparable U.S. treasuries in
\nNovember 1994 to 400 basis points in 1995 after the selloff.<\/p>\n
Hong Kong blue chip Wharf (Holdings) Ltd's [0004.HK] 10-year
\nbond widened from 140 basis points over U.S. Treasuries in
\nNovember 1994 to 220 by March 1995.<\/p>\n
But bankers said reaction has been far more muted this time.
\nYankees -- U.S. dollar bonds sold to American investors by non-
\nU.S. issuers -- illustrate how foreign investors no longer assume
\nthat all Asian markets are identical.<\/p>\n
\"The (Asian) investment grade market broadly speaking is 10 to
\n15 basis points wider (for 10-year paper),\" a syndicate manager
\nwith an Asian investment bank said.<\/p>\n
\"I would say the non-investment grade market is probably 15 to
\n35 basis points wider, (with) maybe a couple of examples that are
\n50 basis points wider,\" he said.<\/p>\n
\"Investors on the whole are not concerned,\" said the Hong
\nKong-based U.S. investment banker. \"We've not seen mass selling.\"<\/p>\n
Road King Infrastructure Ltd [1098.HK], a Hong Kong-owned toll
\nroad operator and China investor, is an example of how buoyant
\nsome issuers are.<\/p>\n
Spreads on its US$140 million 10-year bond widened by just
\nfive basis points, despite its sub-investment grade rating. The
\ncompany is rated BB by Standard and Poor's Corp.<\/p>",
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