Asia liability management
China and India have control
April 01, 2009
Liability management in China is being restricted by offshore rules. In India, it's the exchange rate. Both may be forced to change
Rachel Evans
Asia editor
Liability management has become a buzzword in Asia. Like "minibonds" in the wake of Lehman's collapse, it has become part of the lexicon of terms bandied about by bankers to describe the work they're doing to help companies deal with the turbulent market.
In Asia, liability management describes a range of products that companies and financial institutions are using to deal with commitments made when the market was in better shape. Debt buybacks at the end of 2008 were done to bolster balance sheets and make the most of low debt-trading prices, but deals this year have had a distressed, liability management,flavour. Bond maturities, convertible put-options and pre-IPO financings are causing particular concern.
Products to execute exchange offers for existing debt securities (in which investors take a haircut in return for longer maturity dates) or to alter conversion prices for convertibles are being pedalled as the...
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