Like Tree16Likes
  • 1 Post By Apjace
  • 1 Post By Viktri

Need Pointers on Bonds and Notes Issuances in HK

Closed Thread
  1. #1

    Need Pointers on Bonds and Notes Issuances in HK

    We are working on a business proposal and need to include a separate section at the back re the bonds and notes market in HK. In particularly, (i) something about the kind of financial information which a potential buyer or financial institution would look at in a HK company, before it would decide whether to purchase its bonds and notes and (ii) a few points about how certain aspects of the financial information of a HK company may affect the commercial terms of the bonds and notes (eg term, interest rate, redemption, event of default, security).

    The usual textbooks or academic materials dont seem useful, as we already know the principles but need to be able to apply it to the HK market. I know there are bankers and finance professionals here who specialise in this niche, and wonder whether anyone can offer a few pointers, or point us to a useful source and we can read it up ourselves.


  2. #2

    Join Date
    Mar 2010
    Posts
    6,761

    Do you have any info on defaults in this area of the world ?


  3. #3

    Thank you so much, jrkob. You explain it all much better than any textbook or financial article. This is exactly what we need for the proposal. I hope this is not too much to ask, but would you mind sharing your knowledge re how the private placement market works, in terms of how the commercial terms are decided before the bonds are issued, based on negotiations between an issuer and a buyer which may be a financial institution? For, eg how would they decide interest rate, term of the bond, or whether the bond need to have security? Ie my questions i and ii above, but in the context of a private placement of bonds by an issuer to say a bank or financial institution. Also, is there any major difference in the commercial requirements or criteria if the issuer is a listed or public company, and if it is not?

    I owe you a big one for this.


  4. #4

    Join Date
    Mar 2010
    Posts
    6,761
    Original Post Deleted
    Merci. But all I would like to know is, is the number of defaults on interest payments for corporate bonds rising ?
    For bonds denominated in any currency in HK, SG, or even Japan and SK.
    And do these defaulters declare bankruptcy ?

  5. #5
    Original Post Deleted
    Yes, I am thinking of the latter, and also whether it makes any difference if the "fresh" issuer is a listed company in HK (in which case it would then have shares already being traded in the market but no debt trading)

  6. #6
    Original Post Deleted
    Thank you. This is precisely all we need for finishing up the proposal, and it is now ready to go on Monday.

  7. #7

    Join Date
    Mar 2016
    Posts
    271
    Quote Originally Posted by Morrison:
    Merci. But all I would like to know is, is the number of defaults on interest payments for corporate bonds rising ?
    For bonds denominated in any currency in HK, SG, or even Japan and SK.
    And do these defaulters declare bankruptcy ?
    Interesting thread, came across this yest. (possibly the inspiration for your question?)
    Stocks That Ignore Defaults Are Cruising for a Bruising - Bloomberg View
    Morrison likes this.

  8. #8

    Join Date
    Mar 2010
    Posts
    6,761

    Thanks, that's a very informative article and in line with my gut feeling from following financial news.

    The surprise ( to me ) is that in EU defaults are actually down, compared to the previous year.

    My thinking is that investors will increasingly be willing to settle for less return and thus focus on
    reliable dividend paying stocks. On top of that, these stocks will still be able to borrow at low cost and buy back their own stocks with the proceeds.
    But perhaps that is only wish thinking


  9. #9

    Join Date
    Mar 2010
    Posts
    6,761

    I guess you can not have it all in life.
    Moi, I save the dividend and buy on dips.
    Those dips, sometimes come in the form of flash crashes and offer unique opportunities
    I guess that's the only way to go


  10. #10

    Join Date
    Nov 2014
    Posts
    458
    Original Post Deleted
    I think they've got it backwards. Few bonds are issued because demand for bonds is low, not because of administrative costs in administering the bonds.

    I've placed bonds for listed companies in HK. It's easy. Unless those grants are free money to the companies (would be dumb) rather than just to offset administrative costs, I don't see how this will help the Bond market - especially when interest income would be low, there's the bankruptcy risk, and people can just invest in property.
    z754103 likes this.