이 기사는 2020년 03월 04일 08:00 thebell 에 표출된 기사입니다.

Amid worsening coronavirus woes, global markets start to see Asian bonds differently. Credit default swaps (CDS) premium for South Korea and China, the epicenter of the coronavirus, have risen over the past week, presenting a stark contrast with CDS premium movements in Japan and Hong Kong.

Due to the outbreak of the coronavirus, the CDS premium for some Asian counties has been rising recently. South Korea’s CDS premium, which has remained at a level last seen before the 2008 global financial crisis over the past few months, has recently rebounded. The spread on CDS reflects the cost of hedging credit risks on corporate or sovereign debt.

According to NICE P&I, the CDS premium on South Korea’s foreign exchange stabilization bonds with five-year maturities surged to 30 basis points on February 26 from around 22 basis points between February 17 and 21, just before the number of coronavirus cases jumped. The CDS premium has retreated a bit to 29 basis points on February 27, but it is still the highest level in 2020.

The situation in China is similar. The CDS premium on China’s bonds with five-year maturities, which have hovered around 30 basis points, reached 43 basis points on January 22 when Chinese authorities locked down Wuhan. The CDS premium fell at the beginning of February, but rebounded as the coronavirus continues to spread beyond China.

On the contrary, Japan and Hong Kong have remained stable with the two countries’s CDS premium recording 18 basis points and 35 basis points, respectively, as of February 27. Hong Kong’s CDS premium has been at 35 basis points since February 18.

Japan’s CDS premium has hovered between 15 and 16 basis points over the same period while it rose a bit on February 27. Despite heightened risks on Asian bonds, reactions vary depending on countries.

Amid global institutions’ concerns over Asian bonds, the primary market has been solid. Companies in Japan, Hong Kong and China have issued global bonds continuously. Japan-based Mitsubishi UFJ Financial Group (MUFG) and Mizuho recently sold dollar-denominated bonds worth 3.75 billion dollars and 2.35 billion dollars, respectively, and Hong Kong-based BoCom Leasing HKG issued global bonds.

Chinese companies are also actively selling bonds. Market watchers say that Chinese companies try to minimize coronavirus’ impact on their businesses by raising funds in advance.

In the meanwhile, the Korean paper market seem subdued as it is relatively more sensitive to interest rate movement and many companies already raised funds last year thanks to favorable market condition then. There were very few companies who raised money in February, with Korea Resources Corporation (KORES) postponing its planned issuance of kangaroo bonds.

(By reporter Pi Hye-rim)