U.S. Markets open in 15 mins

Pimco Seeks Gems in New Bonds as Asian Sales Jump to Record

Ameya Karve
1 / 2

Pimco Seeks Gems in New Bonds as Asian Sales Jump to Record

(Bloomberg) -- Asian high-yield dollar bond sales have jumped to a record this year as investor desperation for yield prompts more first-time issuers to come to the market.

That’s got investors including Pacific Investment Management Co. sifting through the more unfamiliar borrowers.

“Over the last two weeks, we have seen more esoteric names and credits like those will provide some interesting opportunity,” Stephen Chang, a portfolio manager at Pimco, said in a phone interview. “We would look to find those gems.”

Asia’s juicy yields have been appealing to many investors including Pimco. The average yield on low-rated dollar bonds from Asia’s emerging market nations over similarly rated credits in the U.S. is hovering near a decade high. The region’s credit market saw a raft of pricings this week, adding to one of the strongest Octobers ever for issuance.

Debut offerings carry unique risks: investors must assess the creditworthiness of the company for the first time, weighing factors including debt loads, corporate governance and sector-specific challenges.

Read: Asia Dollar-Bond Sales Hit Record as Issuers Lock in Cash: Chart

Chang didn’t speak about any specific issuers. But recent borrowers to come to the Asian dollar bond market for the first time include Chengdu Jiaozi Financial Holding Group Co. and Rugao City Economic Trade Development Co. from China, as well as Indian gold financing firm Muthoot Finance Ltd.

(Adds background)

To contact the reporter on this story: Ameya Karve in Mumbai at akarve@bloomberg.net

To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Ken McCallum

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.