Covid-19 could spark junk bond sales by Asian insurers

Credit downgrades caused by Covid-19 could spur a wave of high-risk corporate bond sales by Asian insurers who need to maintain solvency ratios and avoid capital charges. Insurers are likely to be reluctant to hold on to sub-investment grade debt, as capital charges calculated against the increased risk would offset the extra returns available, said Frank Yuen, a senior analyst in the financial institutions’ group at rating agency Moody’s in Hong Kong. The average credit rating …