Pimco Wary on Junk Debt in Asia as Slowdown Hurts Profits
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Investors should be wary of high-yield borrowers as slowing growth in Asia threatens profitability, according to Pacific Investment Management Co., manager of the world’s biggest fixed-income fund.
Companies in Asia outside Japan almost tripled junk bond sales to $19.2 billion this year compared with $6.85 billion during the same period in 2012, data compiled by Bloomberg show. China’s economy will slow to average 6 percent to 7.5 percent annual expansion during the next five years from 9 percent the past five, weighing on the region’s growth, according to a report from Newport Beach, California-based Pimco.