Singapore's commodities-related defaults could turn out to be the canary in the mine.
Despite a modest rebound in resource prices, restructuring specialists like KPMG and Hogan Lovells Lee & Lee see more Asia-Pacific commodities and shipping firms being pushed into delinquency.
Law firm DLA Piper said there could be choppy waters ahead on rising interest rates and US President-elect Donald Trump's overhaul of trade with China. Regional non-bank borrowers face US$76.4 billion (S$110.7 billion) of dollar bonds maturing next year, 24 per cent more than this year, showed Bloomberg-compiled data.
While oil prices have jumped 17 per cent since Mr Trump was elected, they are about half what they were in 2014. Resource prices as a whole are down 64 per cent from their peak before the 2008 global financial crisis, according to the Bloomberg Commodity Index.
Singapore, whose economy relies on shipping and oil service firms, was exposed first because the companies were smaller and less able to tap government support.
"Singapore is a bellwether for the larger Asean and Asian region," said Singapore-based partner Andy Ferris at Hogan Lovells Lee & Lee. "Some of the fundamental problems those industries face won't go away. Many of the companies in the commodities sector have high levels of debt and depressed revenues."
Five companies, such as oil services firms Swiber Holdings and Swissco Holdings, defaulted on nearly $1 billion of bonds this year.
Energy-related companies such as coal miners and oil services firms must repay US$12 billion, showed the Bloomberg-compiled data.
Commodities trader Noble Group's dollar bonds maturing 2020 traded at 84.2 cents on the dollar on Monday, while oil producer MIE Holdings Corp's dollar notes due 2018 traded at 83.3 cents, according to the data.
Mr Graham Martin, head of restructuring at KPMG in Singapore, expects more defaults among oil services and shipping firms throughout Asia, including Malaysia and Thailand, with rising stress in Indonesia where coal miners face low prices.
"We think Indonesia will be one of the top markets for restructuring work in 2017," said Mr Martin, who is planning to add headcount in Jakarta.
KPMG said defaults could widen to include Singapore's developers after home prices dropped by the most in more than seven years in the three months ended Sept 30.
In China, top policymakers said after a meeting this month that controlling financial risk to avoid asset bubbles will be a priority next year. Hogan Lovells' Mr Ferris said "inherent government support" may be gradually withdrawn. At least 28 onshore bonds have defaulted this year, compared with seven in 2015.
"I definitely think we will see further distress out of China... It's a fair bet to say we'll see a sustained level of distress in the bond market throughout Asia next year," he said.