No end in sight for Asia IG loan margin compression

By Shruti Chaturvedi
27 Oct 2016

There has been a relentless downward pressure on the pricing of investment grade loans this year, as lenders choose to preserve the size and quality of their balance sheets even in the face of diminishing returns. Unfortunately, respite from margin compression is not coming any time soon, as volumes remain low and banks’ liquidity and hunger for assets show no signs of abating. Shruti Chaturvedi reports.

Lower deal activity coupled with abundant liquidity and risk aversion amid macro-economic uncertainty have led to a steep fall in pricing of IG loans.

Names such as Hong Kong’s MTR Corp have offered all-ins in the sub-100bp area for five year money, and yet managed to cruise ...

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