Earlier this month, US fund manager Fidelity took the somewhat unusual step of organising a lunch briefing at its office in Hong Kong to educate the media on bond covenants. The fund manager was irked by covenant changes made by Asian high-yield borrowers recently and wanted to drum up support for its cause.
“We need the help of you in the media, the help of rating agencies,” said Sabita Prakash, head of Asian fixed income at Fidelity Worldwide Investment. “In Europe, these things don’t happen. That’s because investors don’t accept it when there are covenant changes. Here, we need to educate investors that not all changes are what they seem...
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