Rock-bottom rates drive soaring Asian issuance of dollar bonds

Rock-bottom rates drive soaring Asian issuance of dollar bonds

Debt sales by governments and companies pass $45bn since start of year

Companies and governments in Asia have tapped dollar bond markets at a blistering pace in the opening weeks of 2021, taking advantage of ultra-low rates to raise funds for acquisitions and cover the costs of the coronavirus crisis.

Issuance of dollar bonds in the region climbed to more than $45bn in the first two weeks of the year, according to Dealogic. That is almost three-quarters of the total amount raised across the whole of January 2020.

“What’s driving the volume is that rates are creating a very opportunistic market for issuers locking in very good long-term funding,” said Ed Tsui, head of Asia-Pacific debt syndicate at Deutsche Bank, referring to rock-bottom US interest rates.

The bumper crop of dollar bonds is set to continue in the coming weeks. Chinese ecommerce group Alibaba is expected to tap debt markets for as much as $8bn this month, according to people directly familiar with the matter.