"Last week was the busiest in a decade for Asian bond issuance" Good to invest in the improvement of efficiency !!!
Appetite grows for Asian corporate debt
By Francesco Guerrera in Hong Kong
Published: September 7 2003 19:50 | Last Updated: September 7 2003 19:50
Asian companies are on course to issue a record amount of bonds this year - a sign that appetite for the region's corporate debt has picked up sharply after recent turbulence in the US Treasuries market.
Last week was the busiest in a decade for Asian bond issuance, with seven deals from companies in South Korea, Hong Kong and Indonesia raising a total of $2.9bn. This suggests investors are not yet switching huge amounts of money from bonds to equities, despite a long bull run in debt markets and tentative signs of a global recovery.
The surprise spurt has pushed the amount of corporate debt raised this year in Asia, excluding Japan, to more than $19bn, compared with $14bn in the same period in 2002, according to research firm Dealogic.
Bond dealers say this year's debt issuance will surpass last year's total of $22bn and could exceed the record $27bn raised in 1997 just before the Asian financial crisis.
Jon Pratt, head of Asia debt at CSFB, which was involved in four of last week's issues, expects debt issuance to reach $30bn as investors deploy substantial cash resources towards higher-yielding Asian debt. "People are in need of investment opportunities. They have been accumulating cash and they need to put it to play," he said.
Bankers expect more issuers to take advantage of strong investor demand. Falling yields and high trading volumes for recently issued bonds should also encourage them to come to the market, they added.
Hong Kong's Airport Authority is expected to start roadshows today for a 10-year issue that could raise up to $500m. Indonesian nickel and gold miner PT Aneka Tambang is also expected to price a US$200m, seven-year bond soon.
Bankers said sentiment towards Asian bonds has improved since July, when swings in US Treasuries prompted many investors to shun the region's borrowers. The outlook for Asian corporate debt has also benefited from receding fears of a war on the Korean peninsula.
"People are getting sanguine about North Korea. They think the issue can be resolved peacefully," said a Hong Kong banker.
Last week, Korea Development Bank raised the amount of a dollar-denominated 10-year bond from $500m to $750m after receiving orders for some $4.2bn. The success prompted KDB - advised by CSFB, Barclays Capital, HSBC and JP Morgan - to tap the market again the following day with an ?500m, five-year bond. |
