Davis Polk partner Gerhard Radtke was quoted in International Financing Review on the high yield bond market in Asia. Gerhard noted that some issuers are holding discussions about potentially resetting and/or reworking covenants in existing bond contracts as a means to loosen terms in the existing notes and stay afloat. “It is very conceptual though at the moment, The current sentiment is very much dominated by trying to give issuers, especially Chinese real estate issuers, breathing room because any enhanced recovery for offshore creditors is dependent on such stabilization of onshore operations,” Gerhard explained.

HY bonds face covenant pressure,” International Financing Review (February 25, 2022) (subscription required)