Lawyers fear another Asian Financial Crisis as bad loans spike

It's 1998 all over again.

Singapore-based Rajah & Tann LLP, Southeast Asia’s largest law firm, fears that an increase in bond defaults across the region will cause as much pain on creditors as the financial crises of 2008 and 1998, according to a report by Bloomberg.

The law firm reckons that distress will spreads from shipping to mining and retail to construction industries, and warns that recovery rates will be similar to those seen in the global credit meltdown and Asian financial crisis.

During past crises, secured creditors recover only less than 33 cents on the dollar from insolvencies in East and South Asia, compared with more than 80 cents in the U.S., according to World Bank studies. 

Read the full report here.