All that Glitters Is not Gold: The Corporate Debt Maturity Structure in Asia Pacific

Abstract

We show that the debt maturity structure of non-financial corporates in Asia Pacific has been generally decreasing over the last two decades. The percentage of total outstanding debt that have a maturity of over 3 years to total outstanding of debt decreased from 66% at the end of 2000 to 46% at the end of 2019, while the median percentage decreased from 40% to 26% over the same period. The decreasing trend could amplify adverse effects caused by credit and liquidity shock. Our result shows that both firms-specific and macroeconomic factors can explain the trend in both advanced economies and emerging market economies, this in turn providing relevant policy implications for policy-makers to contain rollover risk triggered by shortening debt maturity structure in the Asia Pacific.

Keywords: Debt maturity structure, Global Financial Crisis, Asia Pacific region

JEL Classification: G20, G30, G32