A credit conundrum

Despite a region-wide economic slowdown and a rash of corporate defaults, risk premiums on some Asian credits have been tightening. Melvyn Westlake reports


At the heart of Asia’s credit markets is a paradox that grows as the weeks pass. Never mind that emerging Asia was badly shaken by the US terrorist attacks, that it is in recession from Jakarta to Seoul, that exports are nose-diving, and corporate debt default rates are rising; despite all this, the risk premiums for many credits in the region keep on grinding downwards. And, say credit analysts, these contradictory trends are set to continue for some time to come.

“There is a stark

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