Why Australia doesn’t have a domestic high-yield market

Author: Ashley Lee | Published: 20 Aug 2014

Australian corporates are increasingly active in the US high-yield market because their home market has no equivalent. Structural issues prevent the development of domestic high yield.

Government reports have urged the deepening of Australia’s corporate bond market. But there have been only eight corporate high-yield deals in Australia year-to-date with a total value of A$1.9 million ($1.7m million), according to Dealogic.

In May flag airline carrier Qantas opened the domestic high-yield market by selling Australia’s first senior unsecured bond in the wholesale market. But that didn’t open a new market.

"It’s difficult to see a high-yield market in this jurisdiction when compared to the depth of, for example, the US market,...