Bond yields in Asia at record lows, but tide may be about to turn: Nomura

Hong Kong

BORROWING costs for Asian companies have dropped to record lows in the dollar bond market amid a rebound in commodities and China's property market. Nomura Holdings Inc says the tide is about to turn.

Average yields on corporate notes from Asian firms have slid 77 basis points this year to 3.76 per cent, the lowest in data going back to 1996, according to Bank of America Merrill Lynch indexes. The extra yield over government bonds has declined 36 basis points to 242 basis points. Nomura says that as companies' creditworthiness may deteriorate in the next six months, the premiums could rise 40 to 50 basis points.