Non-public confidential information and secondary debt trading in the Asian market

In the past years lenders have become more inclined to sell debt where there are signs of financial distress affecting the borrower. This trend, and increased levels of volatility in the markets, make it timely to revisit risks associated with dealing in secondary debt when in possession of material confidential information (which may also be price sensitive) not available to the market at large. In this alert, we consider market and industry guidelines on dealing with asymmetry of information and the extent to which disclosure arrangements may be necessary in distress situations.