ASIA CREDIT REPORTFirst Quarter 2019

PREPARED IN PARTNERSHIP WITH

ASIFMA is an independent, regional trade association with over 100
member firms comprising a diverse range of leading financial institutions fromboth the buy and sell side including banks, asset managers, law firms andmarket infrastructure service providers. Together, we harness the sharedinterests of the financial industry to promote the development of liquid, deep
and broad capital markets in Asia. ASIFMA advocates stable, innovative andcompetitive Asian capital markets that are necessary to support the region’s
economic growth. We drive consensus, advocate solutions and effect changearound key issues through the collective strength and clarity of one industry
voice. Our many initiatives include consultations with regulators andexchanges, development of uniform industry standards, advocacy forenhanced markets through policy papers, and lowering the cost of doing
business in the region. Through the GFMA alliance with SIFMA in the US and
AFME in Europe, ASIFMA also provides insights on global best practices andstandards to benefit the region.

Table of Contents
G3 Asia ex Developed Market Asia (Japan, Australia and New Zealand) ........................................................ 1
1.1. G3 ex DM Asia: Total Issuance .................................................................................................................... 3
1.2. G3 ex DM Asia: Total Outstanding............................................................................................................... 3
1.3. G3 ex DM Asia: HG Issuance ....................................................................................................................... 3
1.4. G3 ex DM Asia: HG Outstanding ................................................................................................................. 3
1.5. G3 ex DM Asia: HY Issuance ....................................................................................................................... 3
1.6. G3 ex DM Asia: HY Outstanding .................................................................................................................. 3
1.7. G3 ex DM Asia: Total Issuance by Country ................................................................................................... 4
1.8. G3 ex DM Asia: Total Outstanding by Country.............................................................................................. 4
1.9. G3 ex DM Asia: Total Issuance by Sector ..................................................................................................... 4
1.10. G3 ex DM Asia: Total Outstanding by Sector .............................................................................................. 4
1.11. G3 ex DM Asia: HG Issuance by Rating....................................................................................................... 4
1.12. G3 ex DM Asia: HG Outstanding by Rating ................................................................................................. 4
1.13. G3 ex DM Asia: HY Issuance by Rating ....................................................................................................... 5
1.14. G3 ex DM Asia: HY Outstanding by Rating.................................................................................................. 5
1.15. G3 ex DM Asia: Total Issuance by Tenor .................................................................................................... 5
1.16. G3 ex DM Asia: Outstanding by Remaining Tenor ....................................................................................... 5
1.17. Asia ex DM: Total Leveraged Loan Issuance ............................................................................................... 5
1.18. Asia ex DM: Total Leveraged Loan Issuance by Use of Proceeds .................................................................. 5LCY Asia ex Developed Market Asia (Japan, Australia and New Zealand)....................................................... 6
2.1. LCY ex DM Asia: Total Issuance ................................................................................................................... 6
2.2. LCY ex DM Asia: Total Outstanding ............................................................................................................. 6
2.3. LCY ex DM Asia: Issuance by Currency ......................................................................................................... 6
2.4. LCY ex DM Asia: Issuance by Sector ............................................................................................................. 6
2.5. LCY ex DM Asia: Outstanding by Country ..................................................................................................... 6

All Asia ............................................................................................................................................................. 7
3.1. G3 All: Total Issuance ................................................................................................................................. 8
3.2. G3 All: Total Outstanding ........................................................................................................................... 8
3.3. G3 All: HG Issuance .................................................................................................................................... 8
3.4. G3 All: HG Outstanding .............................................................................................................................. 8
3.5. G3 All: HY Issuance .................................................................................................................................... 8
3.6. G3 All: HY Outstanding ............................................................................................................................... 8
3.7. LCY All: Total Issuance ................................................................................................................................ 9

China – Domestic ........................................................................................................................................... 10
4.1. Domestic CNY All: Total Issuance .............................................................................................................. 11
4.2. Domestic CNY All: Total Outstanding ......................................................................................................... 11
4.3. Domestic CNY All: Issuance by Rating ........................................................................................................ 114.4. Domestic CNY All: Outstanding by Rating .................................................................................................. 11
4.5. Domestic CNY All: Issuance by Tenor......................................................................................................... 11
4.6. Domestic CNY All: Outstanding by Remaining Tenor ................................................................................... 114.7. Domestic CNY All: Issuance by Sector ........................................................................................................ 124.8. Domestic CNY All: Outstanding by Sector .................................................................................................. 12

China – CNH ................................................................................................................................................... 13
5.1. CNH All: Total CNH Issuance ..................................................................................................................... 14
5.2. CNH All: Total Outstanding ....................................................................................................................... 14

Page | i5.3. CNH All: Issuance by Rating ...................................................................................................................... 14
5.4. CNH All: Outstanding by Rating................................................................................................................. 14
5.5. CNH All: Issuance by Tenor ....................................................................................................................... 14
5.6. CNH All: Outstanding by Remaining Tenor ................................................................................................. 14
5.7. CNH All: Issuance by Sector ...................................................................................................................... 15
5.8. CNH All: Outstanding by Sector ................................................................................................................ 15

Spreads, Credit & Total Return ...................................................................................................................... 16
6.1. Global HG Corporate Spreads ................................................................................................................... 176.2. Global HY Corporate Spreads.................................................................................................................... 176.3. CNH HG Yield Curve ................................................................................................................................. 176.4. CNH HY Yield Curve ................................................................................................................................. 176.5. CNH NR Yield Curve ................................................................................................................................. 176.6. Global Returns, Quarter-End .................................................................................................................... 176.7. Global Returns, 2018 ............................................................................................................................... 18
6.8. Asia Upgrades / Downgrades ex DM Asia .................................................................................................. 18
6.9. Asia Upgrades / Downgrades, DM Asia ...................................................................................................... 18
6.10. Asian Upgrades & Downgrades, Standard & Poor's, First Quarter 2019 ...................................................... 18

Summary of the Methodologies Adopted for this Report ............................................................................ 19
Disclaimer ...................................................................................................................................................... 24
Credit ............................................................................................................................................................. 25

Page | ii

G3 Asia ex Developed Market Asia (Japan, Australia and New Zealand)Market Overview and Issuance Highlights
Total G3 issuance in 1Q’19 came in at USD 80.8 billion (bn) as of March 31, up 33.7% quarter-over-quarter(qoq) from 4Q’17 (USD 60.4bn) and up 6.3% year-over-year (yoy), inclusive of high grade (HG), high yield (HY),and unrated deals.
Key trends
For the first quarter 2019, total G3 issuance stood at USD 80.8bn, an increase of 33.7% qoq and 6.3% yoy.
China remains the largest issuing country in the first quarter, dominating Asian issuance at USD 49.0bn, or
approximately 60.9% of G3 issuance; of first quarter volume, USD 23.9bn and USD 22.3bn were in HG and HYdeals, respectively. South Korea was the second largest issuer with USD 6.2bn of issuance, followed by India
with USD 5.7bn.
Real estate was the largest sector of G3 issuance in the first quarter (USD 29.4bn), followed by finance (USD
27.3bn) and sovereigns (USD 7.4bn).
In terms of ratings, within the HG space, BBB+ transactions accounted for the largest share of deals priced
during the quarter, with USD 9.6bn in total issuance, followed by BBB rated transactions totaling USD 9.3bn.
Within HY issuance, the B+ category led with USD 6.6bn of issuance, followed by BB- rated transactions of USD
6.4bn.
By tenor, Asia ex-Japan, Australia and NZ G3 deals with tenors of 5 years or less continued to account for thebulk of issuance in 1Q’19, with a total of USD 58.9bn in short tenor issues being priced during the quarter. Of
these, USD 30.8bn were HG deals, USD 24.8bn were HY deals and the balance unrated.
Overall G3 debt outstanding in the region stood at USD 1.2tn at the end of March 2019, increasing 4.0% qoq
and 13.2% yoy. High grade debt accounted for the bulk of total outstanding debt at USD 776.0bn (a 1.4%
increase qoq and 8.0% increase yoy), followed by unrated debt at USD 287.9bn (a growth of 8.0% qoq and21.3% yoy). HY debt was USD 173.7bn (an increase of 9.7% qoq and 26.2% yoy).
China (with USD 633.9bn), South Korea (with USD 130.9bn) and Indonesia (with USD 120.3bn) were the three
regions with the largest shares of G3 debt outstanding, with Indonesia edging out Hong Kong for third placeagain in the first quarter. Ratings-wise among HG issuers, deals rated BBB- (USD 137.4bn) account for thelargest share of debt outstanding, edging out deals rated A+ (USD 135.7bn), while B-rated transactions
outstanding (USD 51.5bn) were the largest in the HY space. By sector, financials with a total of USD 381.6bn
accounted for 31% of outstanding G3 paper, followed by sovereigns (USD 267.6bn) and real estate (USD
153.8bn). Finally, deals with remaining tenors of 5 years or less (USD 758.6bn) accounted for the bulk of total
Asia (ex-Japan, Australia and NZ) debt outstanding.
Turning to the LCY debt markets, USD 213.1bn in total LCY-denominated debt was issued in Asia (ex-Japan,
Australia & NZ) in 1Q’19, a decline of 1.1% qoq (USD 215.6bn) but an increase of 10.1% yoy (USD 193.6bn).
China remains the dominant issuer in the LCY debt markets in the first quarter, with USD 164.1bn issued,
followed distantly behind by South Korea (USD 27.1bn) and Malaysia (USD 6.7bn). Finance continues to remain
the largest category in 1Q’19 with USD 81.2bn issued, followed by construction/building (USD 20.8bn) andreal estate/property (USD 20.1bn).
Total LCY debt outstanding at the end of 1Q’19 in Asia (ex-Japan, Australia and NZ) stood at USD 19.0tn,
growing by 3.1% qoq, with HY and unrated debt outstanding increasing qoq by 3.0% and 3.3%, respectively,

Page | 1

while HG debt outstanding declined 0.9%. China remains the bulk of total outstanding LCY debt at USD 13.1tn(representing more than two-thirds of all LCY debt), followed by India (USD 2.2tn) and South Korea (USD 1.6tn).
State of the Asian leveraged loan market
Asian leveraged loan debt, excluding developed market Asia, increased to USD 44.8bn in 1Q’19, an increaseof 9.2% qoq but a decline of 16.6% yoy. Leading sectors in 1Q’19 issuance were real estate/property (USD
8.1bn), metal & steel (USD 5.9bn), and finance (USD 4.1bn). Leveraged loan issuance was primarily used forcapital expenditures (USD 16.0bn) and acquisitions (USD 9.8bn). Sponsored loan deals, as a percentage ofissuance in the first quarter, more than doubled to 9.0% (from 3.5% for 4Q’18) of deals by dollar amount.

Page | 2

1.1. G3 ex DM Asia: Total Issuance1.2. G3 ex DM Asia: Total Outstanding

G3 ex DM Asia: Total Issuance2011 - 2019:Q1
350,000

G3 ex DM Asia: Total Outstanding
2013:Q3 - 2019:Q1$ millions

1,400$ billions

NR

300,000

HY

NR
1,200

HY

HG

250,000

HG

1,000

200,000

800

150,000
600

100,000
400

50,000
200

0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Q1

2013

2014

2015

2016

2017

Source: Dealogic

1.3. G3 ex DM Asia: HG Issuance1.4. G3 ex DM Asia: HG Outstanding

G3 ex DM Asia: HG Issuance2011 - 2019:Q1
250,00020182019
Source: Bloomberg

G3 ex DM Asia: HG Outstanding
2013:Q3 - 2019:Q1$ millions

900$ billions

800
200,000

700
600

150,000

500
400

100,000

300
50,000

200
100

0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Q1

2013

2014

2015

2016

2017

Source: Dealogic

1.5. G3 ex DM Asia: HY Issuance2019

1.6. G3 ex DM Asia: HY Outstanding

G3 ex DM Asia: HY Issuance2011 - 2019:Q1
100,0002018

Source: Bloomberg

G3 ex DM Asia: HY Outstanding
2013:Q3 - 2019:Q1$ millions

Corp HY andNR
Sovereign
HY and NR

90,00080,00070,000500$ billions

450

NR

400

HY

350

60,000300

50,000250

40,000200

30,000150

20,000100

10,000

50

0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2013

Source: Dealogic

2014

2015

2016

2017

2018

2019

Source: Bloomberg

Page | 3

1.7. G3 ex DM Asia: Total Issuance by Country

1.8. G3 ex DM Asia: Total Outstanding by Country

G3 ex DM Asia: Total Issuance by Country
2019:Q1$ millions

NR
HG

50,000HY
40,00030,00020,00010,000

0

China

South
Korea

India

Hong Kong Indonesia Sri Lanka Singapore Malaysia Philippines

TaiwanThailand

Macao

Mongolia

CHINA
SOUTH KOREAINDONESIAHONG KONG
INDIA
SINGAPORE
PHILIPPINESMALAYSIATHAILANDSRI LANKAMACAU
PAKISTANMONGOLIATAIWANVIETNAMPAPUA N.GUINEAMALDIVESBANGLADESHCAMBODIA
FIJI$ billions

60,000G3 ex DM Asia: Total Outstanding by Country
2019:Q1

0

100

200

300

400

500

1.9. G3 ex DM Asia: Total Issuance by Sector

600

700

Source: Bloomberg

Source: Dealogic

1.10. G3 ex DM Asia: Total Outstanding by Sector

G3 ex DM Asia: Total Issuance by Sector
2019:Q1G3 ex DM Asia: Outstanding by Sector
2019:Q1

Real Estate/Property
Finance
Government
Utility & Energy
Oil & Gas
Construction/Building
MiningComputers & Electronics
Holding Companies
Transportation
Chemicals
Leisure & Recreation
Professional Services
Healthcare
Food & Beverage
TextileRetailAuto/Truck
Insurance
Consumer Products
Metal & Steel

HY

Financials

HG

Government

NR

Real Estate

HY
HG

EnergyNR

Utilities
Industrials
Consumer Discretionary
Materials$ millions

Consumer Staples$ billions

Communications
Technology
Health Care0

10,0005,000

15,00020,00025,00030,00035,000

0

50

100

150

200

250

300

Source: Dealogic

1.11. G3 ex DM Asia: HG Issuance by Rating

350

400

450

Source: Bloomberg

1.12. G3 ex DM Asia: HG Outstanding by RatingG3 ex DM Asia: HG Issuance by Rating
2019:Q1G3 ex DM Asia: HG Outstanding by Ratings
2019:Q1

BBB+

A

BBB

A+

BBB-

A-

A+

AA

A-

AA+

A

AA-

AA+
AA-

AAA

$ billions$ millions

AA

BBB
BBB+

0

2,000

4,000

6,000

8,000

10,00012,000Source: Dealogic

0

20

40

60

80

100

120

140

160

Source: Bloomberg

Page | 4

1.13. G3 ex DM Asia: HY Issuance by Rating

1.14. G3 ex DM Asia: HY Outstanding by RatingG3 ex DM Asia: HY Issuance by Rating
2019:Q1G3 ex DM Asia: HY Outstanding by Rating
2019:Q1

B+

NR

Sovereign

B

Corp
BB-

B+
B-

BB+

BB
BB

BB+
BB-

B

Not
rated

CCC

Corp

CCC+

Sovereign

CCC0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0

50

100

150

200

250

300

350

Source: Bloomberg

Source: Dealogic

1.15. G3 ex DM Asia: Total Issuance by Tenor$ billions$ millions

CB-

1.16. G3 ex DM Asia: Outstanding by Remaining
Tenor

G3 ex DM Asia: Total Issuance by Tenor
2019:Q1G3 ex DM Asia: Outstanding by Remaining Tenor
2019:Q1

10+ Years

HY

7 - 10 Years

HY

10 +

HG

HG

NR

NR
8 - 10 Years

5 - 7 Years

5 - 7 Years

Other

0

10,00020,00030,00040,00050,00060,00070,000$ billions$ millions

0 - 5 Years

<5

0

100

200

300

400

500

Source: Dealogic

1.17. Asia ex DM: Total Leveraged Loan Issuance

600

700

800

Source: Bloomberg

1.18. Asia ex DM: Total Leveraged Loan Issuance by
Use of Proceeds

Asia ex DM: Leveraged Loan Issuance2011 - 2019:Q1
300,000$ millions

Asia ex DM: Leveraged Loan Issuance by Use of Proceeds
2019:Q1

250,000
Capital Expenditures
200,000

Acquisitions

150,000

Working Capital

Repay Debt

General Corporate Purposes
100,000

Project Financing
Refinancing

50,000Property
LBO/MBO
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

Source: Dealogic

Millions0
AircraftShipping
0

2,000

4,000

6,000

8,000

10,000 12,000 14,000 16,000 18,000
Source: Dealogic

Page | 5

LCY Asia ex Developed Market Asia (Japan, Australia and New
Zealand)2.1. LCY ex DM Asia: Total Issuance2.2. LCY ex DM Asia: Total Outstanding

LCY ex DM Asia: Total Issuance2011 - 2019:Q1
1,400,000

LCY ex DM Asia: Total Outstanding
2013:Q3 - 2019:Q1$ millions

20,0001,200,000

18,000$ billions

NR
HY

16,0001,000,000

HG

14,000800,000

12,00010,000600,000

8,000
400,000

6,000
200,000

4,000
2,000

0
2018
2011

2012

2014

2013

2015

2016

2017

2018

2019

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Q1

2013

2014

2016

2015

2017

Source: Dealogic

2.3. LCY ex DM Asia: Issuance by Currency

2.4. LCY ex DM Asia: Issuance by Sector

LCY ex DM Asia: Issuance by Currency
2019:Q1LCY ex DM Asia: Issuance by Sector
2019:Q1$27,146.5

MYR$6,671.1

THB$6,087.2

SGD$3,613.4

HKD$2,039.5

TWD$1,159.0$1,035.3$681.1

IDR$311.4PHP$286.20$ millions

INR
CNH

20,00040,00060,00080,000100,000

120,000

140,000

160,000

180,000

Source: Dealogic

Finance
Construction/Building
Real Estate/Property
Utility & Energy
Oil & Gas
Transportation
Holding Companies
Metal & SteelInsurance
MiningTelecommunications
Food & Beverage
Chemicals
Auto/Truck
Computers & Electronics
RetailAerospace
Government
Consumer Products
Agribusiness
Healthcare
Machinery
Professional Services
Dining & Lodging
TextileForestry & Paper
Leisure & Recreation
Publishing$81,159.3$20,784.1$20,116.6$15,134.3$11,885.1$10,576.7$10,117.1$7,346.9$6,175.8$4,587.9$3,795.7$3,587.8$2,703.9$2,660.1$2,317.9$1,459.8$1,404.5$1,128.6$1,075.7$1,038.7$990.7$901.7$866.5$477.6$297.0$265.8$220.0$68.4
010,00020,00030,000$ millions$164,113.5

CNY
KRW

2018
2019
Source: Bloomberg

40,00050,00060,00070,000 80,000 90,000
Source: Dealogic

2.5. LCY ex DM Asia: Outstanding by Country
LCY ex DM Asia: Outstanding by Country
2019:Q1$13,122.3

CHINA
INDIA
SOUTH KOREA
MALAYSIATHAILANDSINGAPORE
INDONESIATAIWANHONG KONG
PHILIPPINESPAKISTAN
VIETNAM
SRI LANKABANGLADESHPAPUA N.GUINEA
LAOS
FIJI
MACAU
MONGOLIA
AFGHANISTANBRUNEI$2,152.8$1,583.1

0

2,000$ millions$396.8$379.7$288.4$283.6$279.5$214.7$139.3
$61.1
$53.7
$40.3
$19.9
$5.1
$2.6
$0.9
$0.9
$0.5
$0.4
$0.2
4,000

6,000

8,000

10,00012,00014,000Source: Bloomberg

Page | 6

All Asia
Total Issuance & Outstanding – G3 and LCY
Total G3 issuance in Asia (including Japan, Australia and New Zealand) was USD 145.9bn in the first quarter of
2019, an increase of 4.1% qoq and a decline of 2.3% yoy. In 1Q’19, total HG G3 issuance in Asia was USD
94.9bn, a decline of 5.2% qoq and 14.2% yoy; HY issuance was USD 27.9bn, an increase of 218.1% qoq and
72.2% yoy; and unrated issuance was USD 23.1bn, a decline of 26.2% qoq but an increase of 2.2% yoy.
LCY debt issuance, including Japan, Australia, and New Zealand, rose to USD 433.3 bn in the first quarter of
2019, a decline of 25.1% qoq and 17.0% yoy, comprised of USD 285.4bn in HG issuance, USD 3.0bn in HY
issuance and USD 145.3bn in unrated issuance.

Page | 7

3.1. G3 All: Total Issuance3.2. G3 All: Total Outstanding

G3 All: Issuance2011 - 2019:Q1

G3 All: Outstanding in Asia
2013:Q3 - 2019:Q1

800,000

14,000$ millions$ billions

NR

700,000

HG
600,000

HY

12,00010,000500,000

8,000
400,000
300,000

6,000

200,000

4,000

100,000

2,000

0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Q1

2013

2014

2015

2016

2017

Source: Dealogic

3.3. G3 All: HG Issuance3.4. G3 All: HG Outstanding

G3 All: HG Issuance2011 - 2019:Q1
600,00020182019
Source: Bloomberg

G3 All: HG Outstanding
2013:Q3 - 2019:Q1$ millions$ billions

12,000500,000

10,000400,000

8,000

300,000

6,000

200,000

4,000

100,000

2,000
0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Q1

2013

2014

2015

2016

2017

Source: Dealogic

3.5. G3 All: HY Issuance2019

3.6. G3 All: HY Outstanding

G3 All: HY Issuance2011 - 2019:Q1
250,0002018

Source: Bloomberg

G3 All: HY Outstanding
2013:Q3 - 2019:Q1$ millions

12,000$ billions

Corp HY & NR
200,000

10,000

Sovereign HY
& NR

8,000

150,000

6,000

100,000

4,000

NR

50,000

HY

2,000
0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

Source: Dealogic

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2013

2014

2015

2016

2017

2018
2019
Source: Bloomberg

Page | 8

3.7. LCY All: Total Issuance
LCY All: Total Issuance in Asia
2011 - 2019:Q1
3,500,000$ millions

HY
3,000,000

HG
NR

2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

Source: Dealogic

Page | 9

China – Domestic
Total Issuance & Outstanding – Domestic CNY issuanceTotal domestic CNY issuance stood at USD 164.4bn in the first quarter of 2019, down 7.4% from the fourth
quarter (USD 177.5bn) but up 29.9% yoy (USD 126.6bn). By tenor, 69.0% of first quarter issuance (USD
113.4bn) would mature in five years or less, followed by the 7-10 year bucket (USD 23.9bn, or 14.5% of
issuance). By sector, finance led issuance totals (USD 57.3bn), followed by construction (USD 19.8bn) and realestate (USD 16.5bn). Outstanding domestic CNY debt stood at USD 13.0tn at the end of first quarter 2019,with sovereigns leading totals (USD 7.4tn), followed by financials (USD 3.1tn) and industrials (USD 1.1tn).

Page | 10

4.1. Domestic CNY All: Total Issuance4.2. Domestic CNY All: Total Outstanding

Domestic CNY All: Total Domestic Issuance2011 - 2019:Q1
1,200,000

Domestic CNY All: Total Outstanding
2014:Q1 - 2019:Q1$ millions$ trillions

14

1,000,000

12

800,000

10
8

600,000

6

400,000

4
200,000
2
0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

0
2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1

Source: Dealogic

4.3. Domestic CNY All: Issuance by Rating

Source: Bloomberg

4.4. Domestic CNY All: Outstanding by Rating
Domestic CNY All: Outstanding By Rating
2019:Q1

Domestic CNY All: Issuance by Rating2011 - 2019:Q1$ millions
100%

Not rated
BB
A
AAA

90%
80%
70%

B
BBB
AA

60%
50%

$11.633

40%
30%
20%
10%
0%
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

0

2

4

6

8

10

4.5. Domestic CNY All: Issuance by Tenor

12

14

Source: Bloomberg

Source: Dealogic

4.6. Domestic CNY All: Outstanding by Remaining
Tenor

Domestic CNY All: Total Issuance by Tenor
2011 - 2019:Q1

Domestic CNY All: Outstanding By Remaining Tenor
2019:Q1

100%

10,000,000

90%$ millions

9,000,000

80%
8,000,000$9,140,881.1

70%
7,000,000
60%
6,000,000

50%

Other

40%

10+ Years30%

7 - 10 Years

4,000,000

20%

5 - 7 Years

3,000,000

13 Months - 5 Years

2,000,000

10%

5,000,000$1,455,962.4$1,516,146.4$896,659.8

1,000,000

0%
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

Source: Dealogic0< 5 Years

5 - 7 Years

7+ - 10 Years

10+ Years
Source: Bloomberg

Page | 11

4.7. Domestic CNY All: Issuance by Sector

4.8. Domestic CNY All: Outstanding by Sector
Domestic CNY All: Total Outstanding By Sector
2019:Q1

Finance
Construction/Building
Real Estate/Property
Utility & Energy
Oil & Gas
Holding Companies
Transportation
Metal & SteelInsurance
MiningAuto/Truck
Computers & Electronics
Aerospace
Chemicals
Agribusiness
Healthcare
Telecommunications
Professional Services
Food & Beverage
MachineryConsumer Products
Dining & Lodging
TextileLeisure & Recreation
RetailForestry & Paper
Publishing$57,349.35$19,812.22$16,452.28$12,629.36$9,893.24$9,270.34$8,967.51$6,523.49$5,779.62$4,587.86$2,552.06$1,461.28$1,404.46$1,186.12$1,038.69$990.69$887.92$862.91$707.13$518.25$462.48$299.09$297.00$213.96$149.14$89.37$29.580

10,00020,00030,000Government$7,360,722.9

Financials$3,058,226.2

Industrials$1,083,000.4$ millions

Real Estate$418,087.3

Utilities$274,152.0

Energy$255,303.1

Materials$223,964.0

Consumer Discretionary$190,062.1

Consumer Staples$50,776.5

Technology$47,650.4

Health Care

$31,395.6

Communications$16,205.4

Other$103.9040,00050,00060,00070,000Source: Dealogic$ millions

Domestic CNY All: Total Issuance by Sector
2019:Q1

1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000
Source: Bloomberg

Page | 12

China – Offshore Renminbi (CNH)
Key Trends in CNH and the Dim Sum Bond Markets
The pace of offshore issuance declined in the first quarter; an equivalent of USD 1.9bn in CNH bonds were
issued, a decline of 57.2% qoq and 50.0% yoy. In terms of tenor, transactions with tenors of 5-years or lessaccounted for 74.3% of first quarter issuance. HG deals rated AA totaling USD 398.3mn had the highest rating
share among deals (20.8%). In terms of sector, finance was the largest issuer in 1Q’19 (USD 1.2bn), followedby real estate (USD 670.7mn).
The total of dim sum bonds outstanding stood at USD 53.0bn at the end of the first quarter, a decline of 1.4%
qoq and 5.5% yoy. Approximately 11.8% are short-term in tenor, while 86.5% of all bonds retire in less than 5
years. Sovereigns became the largest sector outstanding (USD 24.4bn), followed by financials (USD 23.3bn)
and real estate (USD 2.5bn).
CNH Deposit Base by Location Amt (USD bn)
Hong Kong
90.6
Singapore
19.4
Taiwan42.1
Korea, Republic of
1.2
Luxembourg
9.8
United Kingdom
8.4
France3.0

As of
Feb-19Feb-19Mar-19Feb-19Aug-15
Feb-19Dec-15

Sources: HKMA (Hong Kong), MAS (Singpore), Central Bank ofRepublic of China (Taiwan), Bank of Korea (Korea), Luxembourg for
Finance (Luxembourg), Bank of England (UK), PWC (France);
Exchange Rate: CNH 6.879 = USD 1.0, GBP 1.28 = USD 1.0

CNH deposits dropped slightly in all deposit centers in the most recent data ending the first quarter 2019.

Page | 13

5.1. CNH All: Total CNH Issuance

5.2. CNH All: Total Outstanding

CNH All: Total CNH Issuance2011 - 2019:Q1

CNH All: Total Outstanding
2013:Q3 - 2019:Q1

60,000$ millions$ millions

120,000

50,000100,000

40,00080,00030,00060,00020,00040,00010,00020,000

0
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
0
2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1

Q1
Source: Dealogic

5.3. CNH All: Issuance by Rating

Source: Bloomberg

5.4. CNH All: Outstanding by Rating
CNH All: Outstanding By Rating
2019:Q1

CNH All: Issuance by Rating2011 - 2019:Q1
NR$45,730.9

100%

Not rated
BB
A
AAA

90%
80%
70%

B
BBB
AA

BBB+

$326.7

BBB-$100.2BB

60%$1,943.1

B-$246.4AA-$466.850%$834.4

30%

AA

20%

A+

$143.4

10%

A-$312.2

0%
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

A

$ millions

40%$2,882.8
0

5,000

10,00015,00020,00025,00030,00035,00040,0005.5. CNH All: Issuance by Tenor

45,00050,000Source: Bloomberg

Source: Dealogic

5.6. CNH All: Outstanding by Remaining Tenor
CNH All: Outstanding By Remaining Tenor
2018:Q4

CNH All: Issuance by Tenor
2011 - 2019:Q1
100%

30,000$ millions

90%
25,00080%$24,369.1$26,003.7

70%
20,000

60%
50%

Other

40%

10+ Years30%

7 - 10 Years

20%

5 - 7 Years

10%

15,00010,00013 Months - 5 Years

5,000$2,749.9

0%
2018
2011

2012

2013

2014

2015

2016

2017

2018

2019
Q1

$593.9$-7 - 10 Years

10+ Years

0
Short Term

13 Months - 5
Years

5 - 7 Years

Source: Bloomberg

Source: Dealogic

Page | 14

5.7. CNH All: Issuance by Sector

5.8. CNH All: Outstanding by Sector
CNH All: Total Outstanding By Sector
2019:Q1

CNH All: Total Issuance by Sector
2019:Q1

Government$24,438.5

Financials$670.7

Real Estate

Finance$2,544.6

Industrials$719.9

Utilities$716.8

Technology$644.7

Consumer Staples$231.0$ millions$1,244.6

0

200

400

600

800

1,000

1,200

1,400

Source: Dealogic

Energy$216.6

Consumer Discretionary$181.50$ millions

Real Estate/Property$23,293.1

5,000

10,00015,00020,00025,00030,000Source: Bloomberg

Page | 15

Spreads, Credit & Total Return
Relative Value and returns (Asia ex-Japan, Australia & New Zealand G3)
Asian HG bond spreads traded tighter in 1Q’19 from the fourth quarter (151 bps vs. 157 bps); on the other
hand, US and European HG bonds traded wider at 136 bps (from 132 bps) and 139 bps (from 136 bps)
respectively. HY spreads tightened for Asia to 586 bps in the first quarter (from 634 bps in the fourth quarter)
while US HY spreads European HY spreads widened to 424 bps (from 407 bps) and 434 bps (from 433 bps),
respectively.

Page | 16

6.1. Global HG Corporate Spreads

6.2. Global HY Corporate Spreads

Global HG Corporate Spreads
Jan. 2011 - Mar. 2019350

Global HY Corporate Spreads
Jan. 2011 - Mar. 2019
1,200

Basis Points

Basis Points

US

US

300

Asia

1,000

Asia

EuropeEurope

250

800
200
600
150
400
100
200

50
0
Jan-11

Jan-12

Jan-13Jan-14Jan-15Jan-16

Jan-17Jan-180
Jan-11

Jan-19Jan-12

Jan-13Jan-14Jan-15Jan-16

Jan-17

Source: ICE BofAML

6.3. CNH HG Yield Curve

Jan-196.4. CNH HY Yield Curve
CNH HY Yield Curve

CNH HG Yield Curve
5.1

Jan-18Source: ICE BofAML

30.0

Percent

Percent

4.9

25.0
4.7

20.0
4.5

15.0

4.3
4.1

10.0
3.9

3/31/2018

3/31/201812/31/2018

3.7

12/31/2018

5.0

3/31/2019

3/31/2019

3.5

0.0
0

5

15

10

20

25

30

35

0

1

3

2

4

5

Source: Bloomberg

6.5. CNH NR Yield Curve

6.6. Global Returns, Quarter-End

CNH NR Yield Curve

Total Return (Global)
2018:Q4

Percent

BAML Australia Corporate
BAML Global Credit
BAML Asian Dollar IG
BAML Asian Dollar HG Corporate
BAML Asian Dollar Index
MSCI EM LatAm
BAML Japan Corporate
BAML US Corporate Index
BAML Euro Corporate
BAML Asian Dollar HY Corporate
BAML Asian Dollar HY
BAML Euro High Yield
MSCI EM EEMEABAML US High Yield Index
MSCI EM Europe
MSCI Emerging Markets
Australian All-Ordinaries
MSXI EM Asia
FTSE 100Euro Stoxx 50
S&P
Nikkei 225

4.6
4.4
4.2
4.0
3.8
3.6

3/31/2018

3.4

12/31/2018
3.2

3/31/2019

3.0
0

2

4

6

8

10

12

14

16

Source: Bloomberg

Percent

4.8

6

Source: Bloomberg

-20

-15

-10

-5

0

5

Source: S&P, BAML,MSCIPage | 17

6.7. Global Returns, 2018

6.8. Asia Upgrades / Downgrades ex DM Asia
Standard & Poor's Asia Upgrades/Downgrades ex DM Asia
2012 - 2019:Q1

Total Return (Global)
201845

BAML Australia Corporate
BAML Global Credit
BAML Asian Dollar IG
BAML Asian Dollar HG Corporate
BAML Asian Dollar Index
MSCI EM LatAm
BAML Japan Corporate
BAML US Corporate Index
BAML Euro Corporate
BAML Asian Dollar HY Corporate
BAML Asian Dollar HY
BAML Euro High Yield
MSCI EM EEMEABAML US High Yield Index
MSCI EM Europe
MSCI Emerging Markets
Australian All-Ordinaries
MSXI EM Asia
FTSE 100Euro Stoxx 50
S&P
Nikkei 225

40

Upgrades35

Downgrades

30
25
20

Percent

15
10
5
0
-20

-15

-10

-5

0

5

10

15

FY

FY

FY

FY

FY

2012

2013

2014

2015

2016

Q1

Q2

Q3

2017

Source: S&P, BAML,
MSCI

Q4

Q1

Q2

Q3

2018

Q4

Q1
2019

Source: Standard & Poor's

6.9. Asia Upgrades / Downgrades, DM Asia
Standard & Poor's Asia Upgrades/Downgrades, DM Asia Only2012 - 2019:Q1
40
35

Upgrades30

Downgrades

25
20
15
10
5
0
FY

FY

FY

FY

FY

2012

2013

2014

2015

2016

Q1

Q2

Q3

Q4

2017

Q1

Q2

Q3

2018

Q4

Q1
2019

Source: Standard & Poor's

6.10. Asian Upgrades & Downgrades, Standard & Poor's, First Quarter 2019
UpgradesTokyo Electric Power Company Holdings Inc.

CountryJapan

Date
1/24/2019

RatingBB+

Downgrades
Takeda Pharmaceutical Company Ltd.
Tata Motors Ltd.
Yida China Holdings Ltd.
Guorui Properties Ltd.
Qinghai Provincial Investment Group Co. Ltd.
Tunghsu Group Co. Ltd.
Dr. Peng Telecom & Media Group Co. Ltd.
Honda Motor Co. Ltd.
Nissan Motor Co. Ltd.
Shandong Sanxing Group Col. Ltd.
PT Lippo Karawaci Tbk.
Qingdao City Construction Investment (Group) Ltd.

Country
Japan
India
China
China
China
China
China
Japan
Japan
China
Indonesia
China

Date
1/8/2019
3/27/2019
1/31/20192/3/2019
2/25/20192/18/20193/14/20192/6/2019
2/21/20193/26/2019
1/24/20192/13/2019

Rating
BBB+
B+
CCC+
CCC
CCC+
BB
A
AB+
CCC+
BBB-

Page | 18

Methodology
1. G3 Asia ex Developed Market (Japan, Australia, and New Zealand)
Issuance
Bond transactions are sourced primarily from Dealogic, with supplemental information sourced from
Bloomberg. Unless otherwise noted, all issuance are long-term debt. High grade transactions are defined astransactions with a Dealogic “effective” rating of equal or greater than BBB-, and may include unrated
transactions based on issuer and desk notes. High yield transactions are defined as transactions with a
Dealogic “effective” rating of equal or less than BB+, and may also include unrated transactions based on
issuer and desk notes. Unrated deals are those deals with no effective rating from Dealogic.
“All Asia” issuances are defined as being a corporate bond issue having a Dealogic “deal nationality” as within
Asia, regardless of market, including domestic. Sovereign, sub-sovereign, medium-term notes, and agencies
are also included from issuance, while supranational and ABS/MBS issuers are excluded from issuance. Loansare excluded from issuance as well.
“DM”, or Developed Market Asia, include those deals with a Dealogic deal nationality from Australia, Japan,
and New Zealand. “Ex DM Asia” will refer to all deals excluding those deals with a Dealogic deal nationality
from Australia, Japan, and New Zealand.
G3 deals are defined a subset of deals in “All Asia” that are rank eligible, according to Dealogic’s rank eligibility
guidelines, with a tranche currency in US dollar (USD), European euro (EUR), or Japanese yen (JPY). There may
exist deals within “All Asia” issuance that are denominated in a G3 currency but are not rank eligible andtherefore not included in G3 tables but may be included in all other non-G3 exclusive tables.
“LCY”, or local currency, are defined as a subset of deals in “All Asia” flagged by Dealogic local currency flag.
G3 and LCY deals are not mutually exclusive and may overlap (e.g., in the case of Japanese JPY deals).
All issuances are denoted in USD equivalents based on exchange rates as of the issue date of the bond.
Outstanding
Outstanding figures are sourced from Bloomberg and contain all bonds from its corporate securities database,including private placements. Structured notes and debt secured by assets are excluded. All other criteria hew
closely to the criteria for issuance.
All outstandings are denoted in USD equivalent based on exchange rates as of quarter-end.
Outstanding G3 deals are defined a subset of deals in “All Asia” that are rated with at least one rating by oneof the four rating agencies: Fitch Ratings, Moody’s, Standard & Poor’s, or DBRS; and denominated in US dollar(USD), European euro (EUR), or Japanese yen (JPY). Deals that are not rated by one of the four rating agencies(those deals with a Bloomberg composite rating of “NA”) are excluded. The “NA” exclusion is due to overlap
between rank ineligible deals and those deals with no rating; a close analysis of the data reveals that thefigures for data excluding “rank ineligible” deals and the figures for data excluding data rated N.A. in
Bloomberg are similar.

Page | 19

1.1., 1.3, 1.5., 1.7., 1.9., 1.11., 1.13., 1.15., 1.17., 1.18.
Data are sourced from Dealogic.
Issuance by country is determined by Dealogic’s deal nationality.
Issuance by tenor is determined by years of maturity at issuance.
Issuance by sector is defined by Dealogic’s General Industry Group (“GIG”) groupings and are not analogous
to Bloomberg’s Sector grouping.
1.2., 1.4., 1.6., 1.8., 1.10., 1.12.
Data are sourced from Bloomberg.
Outstanding by rating are by current composite rating assigned by Bloomberg. Composite ratings byBloomberg are the average of ratings assigned by Moody’s, Standard & Poor’s, Fitch Ratings, and DBRS; aminimum of two ratings must be given to a bond before a composite rating is generated. “NR” denotes a bondwith a single rating assigned by the four rating agencies, whereas “NA” denotes a bond with no rating fromany of the four.
Outstanding by tenor are based on current tenor as quarter-end. “Other” includes those bonds with no listed
maturity date and perpetuals.
2. LCY Asia ex Developed Market Asia (Japan, Australia and New Zealand)
2.1. - 2.4.
Issuance data are sourced from Dealogic according to the criteria outlined in Section 1. Outstanding data aresourced from Bloomberg according to the criteria outlined in Section 1.
3. All Asia
3.1. – 3.9.
Issuance data are sourced from Dealogic according to the criteria outlined in Section 1. Outstanding data aresourced from Bloomberg according to the criteria outlined in Section 1.
4. Domestic CNY
Issuance
Bond transactions for CNY are sourced from Dealogic and are defined as all issued debt denominated inrenminbi (CNY) and in the domestic debt markets. CNY-denominated deals issued in the euro, foreign, orinternational markets are excluded. There are no restrictions on deal type and will include supranationals,
medium-term notes, money market notes, securitisations, and commercial paper debt. Due to the lower
restrictions in CNY issuance, CNY-denominated deals outside of Section 5 and 6 are a subset of the deals
contained in Section 5 and 6.
Outstanding
Bond transactions for CNY are sourced from Bloomberg and are defined as debt denominated in CNY andissued in the domestic or domestic MTN markets. CNY-denominated deals issued in the euro, foreign, orinternational debt markets are excluded. Deals include corporate high grade bonds, high yield bonds, mediumterm notes, money market and commercial paper debt. The combination of CNH and CNY debt exclude a small
minority of dual-currency deals that are non-domestic, non-dim sum debt.
All outstanding are denoted in USD equivalent based on exchange rates as of quarter-end.

Page | 20

4.1. – 4.8.
Issuance data are sourced from Dealogic in accordance to the criteria specified in Section 5. Outstanding data
are sourced from Bloomberg in accordance to the criteria specified in Section 5.
5. CNH
Issuance
Bond transactions for CNH are sourced from Dealogic and are defined as all debt denominated in renminbi(CNY) issued and in the euro, foreign, or international debt markets. CNY-denominated deals issued in thedomestic market are excluded. There are no restrictions on deal type and will include supranationals, mediumterm notes, money market notes, securitisations, and commercial paper debt. Due to the lower restrictions in
CNH issuance, CNH-denominated deals outside of Section 5 and 6 are a subset of the deals contained in Section
5 and 6.
All issuance are denoted in USD equivalents based on exchange rates as of the issue date of the bond.
Outstanding
Bond transactions for CNH are sourced from Bloomberg and are defined as debt denominated in CNY andissued in the euro, foreign, or international debt markets. CNY-denominated deals issued in the domestic
market are excluded. Deals include corporate high grade bonds, high yield bonds, medium-term notes, money
market, securitisations, and commercial paper debt. The combination of CNH and CNY debt exclude a small
minority of dual-currency deals that are non-domestic, non-dim sum debt.
All outstandings are denoted in USD equivalent based on exchange rates as of quarter-end.
5.1. – 5.8.
Issuance data are sourced from Dealogic in accordance to the criteria specified in Section 4. Outstanding data
are sourced from Bloomberg in accordance to the criteria specified in Section 6.
6. Spreads, Credit Quality & Total Return6.1. – 6.2. Global Corporate Spreads
High grade and high yield US and European corporate spreads are sourced from Bank of America-Merrill Lynch(ICE BofAML) indices. Spreads are over government debt.
US high grade spreads are sourced from ICE BofAML’s US Corporate Index (C0A0) and tracks the performanceof US dollar denominated investment grade corporate debt publicly issued in the US domestic market.
Qualifying securities must have an investment grade rating (based on an average of Moody’s, S&P and Fitch),at last 18 months to final maturity at the time of issuance, at least one year remaining term to final maturity
as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of USD 250 million.
Original issue zero coupon bonds, 144a securities (with and without registration rights), and pay-in-kindsecurities (including toggle notes) are included in the index. Fixed-to-floating rate securities are included
provided they are callable within the fixed rate period and are at least one year from the last call prior to thedate the bond transitions from a fixed to a floating rate security. Contingent capital securities, including thosewith automatic principal write-down provisions, are included in the index provided they do not have an
automatic common equity conversion, unless the conversion is activated by a regulatory authority in whichcase they are included. Other hybrid capital securities, such as those that potentially convert into preference
shares, those with both cumulative and non-cumulative coupon deferral provisions, and those with alternative
coupon satisfaction mechanisms, are also included in the index. Securities issued or marketed primarily toretail investors, equity-linked securities, securities in legal default, hybrid securitized corporates, Eurodollar

Page | 21bonds (USD securities not issued in the US domestic market), taxable and tax-exempt US municipal securities
and DRD eligible securities are excluded from the index.
European high grade spreads are sourced from ICE BofAML’s Euro Corporate Index (ER00) and tracks theperformance of EUR denominated investment grade corporate debt publicly issued in the Eurobond or Euro
member domestic markets. Qualifying securities must have an investment grade rating (based on an averageof Moody’s, S&P and Fitch), at last 18 months to final maturity at the time of issuance, at least one year
remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amountoutstanding of EUR 250 million. Original issue zero coupon bonds and pay-in-kind securities, including toggle
notes, are included in the index. Callable perpetual securities qualify provided they are at least one year fromthe first call date. Fixed-to-floating securities also qualify provided they are callable within the fixed rate period
and are at least one year from the last call prior to the date the bond transitions from a fixed to a floating ratesecurity. Contingent capital securities are included in the index provided they do not have an automaticcommon equity conversion feature; these securities with triggers activated by a regulatory authority, including
conversions into equity, qualify for inclusion. Also qualifying for inclusion are contingent capital securities withprincipal write-down triggers. Hybrid capital securities qualify for the index, including those potentiallyconverting into preference shares, those with both cumulative and non-cumulative coupon deferralprovisions, and those with alternative coupon satisfaction mechanisms. Euro legacy currency, equity-linked
and securities in legal default are excluded from the Index. Securities issued or marketed primarily to retailinvestments do not qualify for inclusion in the index.
US high yield spreads are sourced from ICE BofAML’s US High Yield Index (H0A0) and tracks the performanceof US dollar denominated below investment grade corporate debt publicly issued in the US domestic market.
Qualifying securities must have a below investment grade rating (based on an average of Moody’s, S&P and
Fitch), at last 18 months to final maturity at the time of issuance, at least one year remaining term to final
maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $100
million. In addition, qualifying securities must have risk exposure to countries that are members of the FXG10, Western Europe or territories of the US and Western Europe. The FX-G10 includes all Euro members, theUS, Japan, the UK, Canada, Australia, New Zealand, Switzerland, Norway and Sweden. Original issue zero
coupon bonds, 144a securities (with and without registration rights), and pay-in-kind securities (including
toggle notes) are included in the index. Callable perpetual securities are included provided they are at least
one year from the first call date. Fixed-to-floating rate securities are included provided they are callable within
the fixed rate period and are at least one year from the last call prior to the date the bond transitions from afixed to a floating rate security. Contingent capital securities, including those with automatic principal writedown provisions, are included in the index provided they do not have an automatic common equity
conversion, unless the conversion is activated by a regulatory authority in which case they are included. Other
hybrid capital securities, such as those that potentially convert into preference shares, those with both
cumulative and non-cumulative coupon deferral provisions, and those with alternative coupon satisfaction
mechanisms, are also included in the index. Securities issued or marketed primarily to retail investors, equitylinked securities, securities in legal default, hybrid securitized corporates, Eurodollar bonds (USD securities
not issued in the US domestic market), taxable and tax-exempt US municipal securities and DRD eligible
securities are excluded from the index.
European high yield spreads are sourced from ICE BofAML’s Euro High Yield Index (HE00) and tracks theperformance of EUR denominated below investment grade corporate debt publicly issued in the euro
domestic or eurobond markets. Qualifying securities must have a below investment grade rating (based on anaverage of Moody’s, S&P and Fitch), at least 18 months to final maturity at the time of issuance. In addition,
qualifying securities must have at least one year remaining term to final maturity, a fixed coupon scheduleand a minimum amount outstanding of EUR 100 million. Original issue zero coupon bonds, “Global”

Page | 22

securities (debt issued simultaneously in the Eurobond and euro domestic markets), 144a securities and payin-kind securities, including toggle notes, qualify for inclusion in the index. Callable perpetual securities qualify
provided they are at least one year from the first call date. Fixed-to-floating securities also qualify provided
they are callable within the fixed rate period and are at least one year from the last call prior to the date thebond transitions from a fixed to a floating rate security. Contingent capital securities are included in the index
provided they do not have an automatic common equity conversion feature; these securities with triggers
activated by a regulatory authority, including conversions into equity, qualify for inclusion. Also qualifying forinclusion are contingent capital securities with principal write-down triggers. Hybrid capital securities qualify
for the index, including those potentially converting into preference shares, those with both cumulative andnon-cumulative coupon deferral provisions, and those with alternative coupon satisfaction mechanisms. Euro
legacy currency, equity-linked and securities in legal default are excluded from the Index. Securities issued or
marketed primarily to retail investments do not qualify for inclusion in the index.
Asian high grade and investment grade spreads are sourced from J.P. Morgan’s Asia Credit Index (JACI) andtracks the performance of USD-denominated Asian debt in the Asian ex-Japan region. Qualifying countries arethose Asian region excluding Japan, including: China, Hong Kong, Indonesia, India, South Korea, Sri Lanka,
Mongolia, Macao, Malaysia, the Philippines, Pakistan, Singapore, Thailand, Taiwan and Vietnam. Minimum
deal sizes are $150 million and at least 12 months to final maturity at time of issuance. Fixed and floating rate
instruments, and debt issued by sovereign, quasi-sovereign and corporate entities qualify for inclusion.
Convertible bonds do not qualify for inclusion in the index.
6.3. – 6.5. China CNH Yield Curves
The securities underlying this curve are a subset of CNH data and sourced from Bloomberg; please see section
6 for more details regarding criteria. Ratings are determined by Bloomberg composite rating. Curves are fittedusing Nelson-Siegel regression on mid-yield to maturity of underlying bonds.
6.6. – 6.7. Total Return (Quarter-End and YTD)
Total return data are sourced from various global bond and equity, including, but not limited to: the Bank ofAmerica-Merrill Lynch, Standard & Poor’s, J.P. Morgan, and MSCI,
6.10. – 6.10. Asian Issuer Rating Actions
European issuer upgrades and downgrades are sourced from S&P. and are a combination of both emerging
market, Japan, Australia, and New Zealand rating actions. Multiple upgrades or downgrades of a single issuer
are counted separately. Rating actions are inclusive of both corporate (both credit, policy, or merger-related)
as well as sovereign ratings.
Due to publication timing, these data set may run on a quarter lag.

Page | 23

Disclaimer
The information and opinion commentary in this Asia Credit Report (Report) was prepared by the leveraged
finance division of the Asia Securities Industry and Financial Markets Association (ASIFMA) and the Securities
Industry and Financial Markets Association (SIFMA). ASIFMA and SIFMA believe that the information in theReport, which has been obtained from multiple sources believed to be reliable, is reliable as of the date of
publication. In no event, however, does either of ASIFMA and SIFMA make any representation as to theaccuracy or completeness of such information. ASIFMA and SIFMA have no obligation to update, modify oramend the information in this Report or to otherwise notify readers if any information in the Report becomesoutdated or inaccurate. ASIFMA and SIFMA will make every effort to include updated information as it
becomes available and in subsequent reports. As information is collected from multiple sources and estimatesby the individual sources may differ from one another, estimates for similar types of data could vary within
the Report.

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CreditASIFMA
Vijay Chander, Executive Director, Fixed Income
Miles Wu, Associate, Fixed Income
SIFMA Research
Katie Kolchin, CFA, Managing Director, Director of Research
Sharon Sung
Justyna Podziemska
research@sifma.org

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