, Columnist
Asia's Junk Heart Risks Cardiac Arrest
Investors' love of speculative-grade notes could spell painful times ahead.
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High-yield bonds have become the world's hottest commodity as investors try to ride the global rally in stock markets. In Asia, however, that could mean dangerous times ahead.
On Monday, Road King Infrastructure Ltd. raised $300 million selling dollar bonds to yield 7.95 percent. Preliminary price talk centered around the 8.625 percent mark but demand was so strong that the Chinese developer managed to knock off almost 70 basis points. Orders exceeded $5.5 billion, more than 18 times the amount of notes on offer, even though Moody's rates Road King B1, four notches below investment grade.