Cracks are showing in Southeast Asia’s credit markets as struggling companies in troubled industries seek to repair their balance sheets, according to Rajah & Tann Singapore LLP, which manages the largest network of corporate lawyers in the region.
The law firm, which has handled local units of Lehman Brothers Holdings Inc. and MF Global Inc. in their bankruptcy cases, said a slowing Chinese economy and more risk aversion among alternative capital providers will make it more challenging for some companies to meet maturing obligations. While credit markets have rallied this year amid more dovish steps by central banks, some weaker borrowers may still struggle to roll over debt.
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