Key Takeaways
- • APAC high-yield bond issuance reached USD 50.19bn across 80 deals and 98 tranches in the ten months through 31 October 2026, already 28% above the full-year 2025 total of USD 39.15bn, according to Debtwire.
- • SoftBank Group's USD 10bn and EUR 1bn multi-tranche offering in September, used to help fund its OpenAI investment, was the largest HY bond deal by an APAC issuer, drawing about USD 20bn of preliminary investor interest.
- • Property stress has spread to state-backed developers: Zhuhai Huafa Group, an investment-grade-rated LGFV, is negotiating extensions with banks and has received a pledged allocation of more than CNY 100bn (USD 15bn) from the Zhuhai government, while China Vanke relies on Shenzhen Metro support to avoid a formal default.
- • Chinese property contracted sales fell 15% YoY to CNY 838bn in 9M26 and real estate investment fell 21% YoY to CNY 5.34tn, indicating developers remain reluctant to commit capital to new projects.
- • Continued US Treasury volatility and prolonged Middle East conflict could deter further issuance in the remaining months of 2026.
Summary
According to Debtwire, Asia Pacific non-investment-grade credit this year has been shaped by three themes: relatively strong high-yield primary issuance, the spread of property stress to state-backed Chinese developers, and growing scrutiny of Australian private credit, particularly in real estate. High-yield issuance in the region hit USD 50.19bn through 80 deals across 98 tranches in the ten months to 31 October, exceeding the full-year 2025 total and comfortably ahead of the combined 2023 and 2024 volume of USD 35.76bn. Japan contributed USD 16.55bn, or 33%, driven largely by SoftBank Group's September offering. India ranked second with a 12% share, with USD and EUR issuance up 28% YoY to USD 6.09bn, of which Vedanta Resources accounted for USD 2.15bn. Australia was third at USD 4.16bn, led by metals and mining issuers including PLS Group, Whitehaven Coal and Mineral Resources. Pakistan returned to the international high-yield market after a three-year hiatus, raising USD 3.75bn year to date, including a USD 3bn deal, with support from the IMF and Islamic Development Bank. Macau gaming operators issued USD 1.59bn, while mainland Chinese issuance fell 20% YoY to USD 3.47bn.
Volumes could rise further before year-end, although Debtwire flags US Treasury volatility and the risk of a prolonged Middle East conflict as potential deterrents. Pipeline candidates include Hanuman Wind Power, a unit of Energy Absolute, which has failed twice to price a USD bond; Pengxin International Mining, which seeks funding for USD 600m of capex; GM3, which plans to refinance a USD 625m loan due 2029; and Bangladesh, reportedly planning up to USD 1bn in its first international sovereign bond.
China's property malaise is entering its fifth year since China Evergrande's 2021 default. Evergrande has been in liquidation since January 2024, and its nearly USD 20bn of offshore bonds have largely lost value. Liquidity strains have now reached state-backed developers Zhuhai Huafa Group and China Vanke. Per Debtwire, Huafa has begun discussions to extend bank loan and non-standard debt maturities, with CICC leading due diligence, and missed payments on two trust products; 21st Century Business Herald reported on 4 November that the Zhuhai government will allocate more than CNY 100bn (USD 15bn) to support the group. Huafa's guaranteed CNH bonds declined 30-70 points in October. Road King Infrastructure has proposed restructuring USD 2.4bn of offshore debt on terms treating bonds and perpetual securities equally, a contentious plan.
Sector data remain weak. Contracted sales of Debtwire-tracked developers fell from CNY 5.03tn in 2021 to CNY 1.33tn in 2025, and fell a further 15% YoY to CNY 838bn in 9M26, while real estate investment declined 21% YoY to CNY 5.34tn. As of 23 October, 66 of 84 tracked developers (79%) had defaulted, entered restructuring, or pursued distressed financing, with about USD 149.37bn of offshore public bonds outstanding. Nonetheless, performing developers raised USD 2.36bn in offshore HY bonds through 31 October, above the USD 1.96bn raised in the same period of 2025.
China Vanke has avoided a formal default but continues to deteriorate. It reported a CNY 23.94bn net loss attributable to shareholders in 9M26, following a CNY 88.56bn loss in 2025. Total cash fell to CNY 52.45bn at 30 September 2026 from CNY 67.24bn at end-2025, against total debt of CNY 330.86bn, of which CNY 189.80bn falls due by 30 September 2027. Shenzhen Metro Group has provided cash support to fund amend-and-extend deals on 10 onshore bonds totalling CNY 18.1bn, under which 40% of principal was repaid at maturity and 60% deferred one year. A key test arrives in December, when 60% of two restructured onshore tranches becomes payable. Vanke's offshore lender meetings aim for an early December signing to term out offshore loans.
Volumes could rise further before year-end, although Debtwire flags US Treasury volatility and the risk of a prolonged Middle East conflict as potential deterrents. Pipeline candidates include Hanuman Wind Power, a unit of Energy Absolute, which has failed twice to price a USD bond; Pengxin International Mining, which seeks funding for USD 600m of capex; GM3, which plans to refinance a USD 625m loan due 2029; and Bangladesh, reportedly planning up to USD 1bn in its first international sovereign bond.
China's property malaise is entering its fifth year since China Evergrande's 2021 default. Evergrande has been in liquidation since January 2024, and its nearly USD 20bn of offshore bonds have largely lost value. Liquidity strains have now reached state-backed developers Zhuhai Huafa Group and China Vanke. Per Debtwire, Huafa has begun discussions to extend bank loan and non-standard debt maturities, with CICC leading due diligence, and missed payments on two trust products; 21st Century Business Herald reported on 4 November that the Zhuhai government will allocate more than CNY 100bn (USD 15bn) to support the group. Huafa's guaranteed CNH bonds declined 30-70 points in October. Road King Infrastructure has proposed restructuring USD 2.4bn of offshore debt on terms treating bonds and perpetual securities equally, a contentious plan.
Sector data remain weak. Contracted sales of Debtwire-tracked developers fell from CNY 5.03tn in 2021 to CNY 1.33tn in 2025, and fell a further 15% YoY to CNY 838bn in 9M26, while real estate investment declined 21% YoY to CNY 5.34tn. As of 23 October, 66 of 84 tracked developers (79%) had defaulted, entered restructuring, or pursued distressed financing, with about USD 149.37bn of offshore public bonds outstanding. Nonetheless, performing developers raised USD 2.36bn in offshore HY bonds through 31 October, above the USD 1.96bn raised in the same period of 2025.
China Vanke has avoided a formal default but continues to deteriorate. It reported a CNY 23.94bn net loss attributable to shareholders in 9M26, following a CNY 88.56bn loss in 2025. Total cash fell to CNY 52.45bn at 30 September 2026 from CNY 67.24bn at end-2025, against total debt of CNY 330.86bn, of which CNY 189.80bn falls due by 30 September 2027. Shenzhen Metro Group has provided cash support to fund amend-and-extend deals on 10 onshore bonds totalling CNY 18.1bn, under which 40% of principal was repaid at maturity and 60% deferred one year. A key test arrives in December, when 60% of two restructured onshore tranches becomes payable. Vanke's offshore lender meetings aim for an early December signing to term out offshore loans.
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