New York
ASIA'S yield-hungry investors have a lot riding on the financial engineers of Wall Street.
Faced with near record-low interest rates at home, money managers in Korea, Japan and China have been piling into complex and increasingly risky structured loan products in America. Their investments in collateralised loan obligations (CLO) - including the high-yield "equity" tranches most exposed to defaults - have helped drive a doubling of issuance in 2017.
The bets have performed well so far. But some observers worry that Asian buyers are overlooking risks. Headwinds in the retail and energy sectors have raised the spectre of defaults, while Moody's Investors Service has stopped evaluating one...
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