Our four-part multimedia series, "High-Yield Bonds in Asia: What Every Issuer Needs to Know," offers practical insights on high-yield debt for Asia-based issuers seeking to understand important covenants and trends.

Part 1: Overview

Since the Asian financial crisis of the late 1990s, the region's high-yield debt capital markets have expanded dramatically. And during the past several years, amid an expanding global economy, issuance volumes have hit record levels, with exciting changes in deal structures and covenant packages.

In this first video of our "High-Yield Bonds in Asia - What Every Issuer Needs to Know", partner Jason T. Elder provides a snapshot of the high-yield bonds market in Asia and discusses the purpose of high-yield bond covenants.  

Part 2: General Principles of a High-Yield Covenant Package

High-yield bonds are complex debt instruments with tailored covenant packages. Understanding how these covenants work and how to tailor a covenant package is essential to ensuring the issuance of cost-effective high-yield debt that does not restrict the ability to expand a growing business.

In this video, the second in our series on "High-Yield Bonds in Asia - What Every Issuer Needs to Know," Mayer Brown partner Jason T. Elder explains how covenants work and how to structure a tailored covenant package by illustrating the "credit group" concept, the general principles for a high-yield covenant package and the issue of structural subordination.

Part 3: Limitation on Indebtedness Covenant

Understanding how debt covenants work and how to navigate them ensures that a high-yield bond is tailored to the needs of both investors and the issuer.

In this third video of our series "High-Yield Bonds in Asia - What Every Issuer Needs to Know," Mayer Brown partner Jason T. Elder discusses one of the most important covenants, the debt covenant, including its purpose, ratio debt and permitted debt exemptions.

Part 4: Restricted Payments Covenant

In this fourth and final video of our series, Mayer Brown partner Jason T. Elder explains the restricted payments covenant, how the net income basket is calculated, when it is used and how issuers comply with a restricted payments covenant when paying dividends or making investments outside the credit group.

August 26, 2019

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This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.