By Amy Lam
Updates comments from Dealogic
HONG KONG (Dec 28) -- Bond issuers in Asian countries outside of Japan raised a record $438.93 billion through notes issued in U.S. dollars, Japanese yen and euros this year, up nearly 40% from the year ago, according to markets data provider Dealogic.
Chinese issuers raised $217.73 billion across 311 G3 bonds, which are notes denominated in dollars, euros and yen, up 81% from 2016, the data updated till Dec. 27 showed. China's issuances accounted for almost half the total international bond deals in the region. Australian and South Korean issuers raised $77.15 billion and $29.91 billion, respectively, ranking second and third.
Chinese corporates flocking to the offshore bond market propelled the record-setting volumes in the region this year.
"China was a main driver for the boom," Rachel Shao, debt capital markets regional research manager at Dealogic, told Nikkei Markets, citing the bear onshore bond market as one of the contributing factors. "According to Dealogic data, we do see an obvious contrast between a booming offshore (market) and a declining onshore (market)".
Real estate sector onshore bond issuance this year came in at about $50 billion, only a third of last year's volume, Shao said. "While the offshore number (of the real estate sector) this year was actually triple that of last year."
China's high-yield G3 bond issuance jumped to $35.1 billion across 94 bond deals this year, compared with $9.08 billion last year.
Real estate companies raised $25.54 billion through the bonds, making up 72.8% of China's international bond issuances in 2017.
"Chinese developers were facing more regulatory pressure because of the domestic housing price control and they were discouraged from issuing more bonds this year, so they went to the offshore market to issue U.S. dollar bonds," Dealogic's Shao said.
Holding companies contributed about 7% of the issues. Shao said companies such as Fosun Holdings have refinancing needs after a lot of overseas mergers and acquisitions.
Shao expects that Chinese property issuers may remain a major contributor to high-yield bond issuance in Asia's largest economy in 2018, as declining housing sales and rising land prices will drive funding requirements.
Chinese issuers are poised to have more than $10.52 billion in outstanding international bond issuances maturing next year, $14.69 billion in 2019 and $22.6 billion in 2020, according to data from Dealogic.
- By Amy Lam; amy.lam@NikkeiNewsrise.com; +85239605153
- Edited by Suzannah Benjamin
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