March 20, 2014 1:00 pm JST

East Asia issues record outstanding bonds at end of 2013

MINORU SATAKE, Nikkei staff writer

MANILA -- A record $7.355 trillion outstanding bonds were issued in local currencies at the end of 2013 within East Asia, excluding Japan, the Asian Development Bank said Thursday. The figure is an increase of 11.7% on the year.

     The Manila-based regional financial watchdog compiles data on local currency-denominated bonds issued in China, South Korea, Singapore and six other countries and regions on a quarterly basis. The outstanding balance of bond issuance in these countries and regions accounted for over 70% of Japan's balance in the same year, about $10 trillion. In China, responsible for 60% of the total issuance, the amount of bonds issued grew 13.6% on the year. Indonesia saw a 20.1% rise in issuance.

     Corporate bonds accounted for nearly 40% of the total. The outstanding balance of corporate bonds issued rose 19.7% on the year to $2.82 trillion at the end of 2013.

     The trend has been driven by energy and domestic demand-related firms. These businesses are expanding financial needs to keep pace with economic growth in their countries. The companies are also diversifying procurement sources beyond conventional borrowings from banks.

     The ADB pointed out global economic uncertainties, such as the Ukraine crisis, and warned governments in the region of the need to carry out structural reforms, such as curbing fiscal debts, to avoid crises.