Market Overview and Highlights of Asia (ex-Japan, Australia and New Zealand) debt issuance in Fourth Quarter 2014

Total issuance in 4Q’14 came in at USD 47.91 billion (bn) as of December 31 bringing 2014 issuance to USD 195.96bn, a new high in G3 issuance. Fourth quarter issuance is above quarter-over-quarter (qoq) from 3Q’14 (USD 40.61bn) and up 64.8% year-over-year (yoy), inclusive of high grade (HG), high yield (HY), and unrated deals.

Key trends in Asia (ex-Japan, Australia and New Zealand) G3 & LCY bond issuance

For the fourth quarter 2014, total G3 issuance stood at USD 47.91bn, with HG transactions accounting for USD 36.47bn, HY issues accounting for a total of USD 6.41bn, and unrated issues accounting for 5.02bn. China remains the largest issuing country in the fourth quarter, accounting for a total of USD 28.42bn, or nearly 60%, of G3 issuance in 4Q’14, with USD 24.10bn and USD 1.85bn in HG and HY deals, respectively, priced from China alone. Hong Kong replaced India to be second in issuance with USD 6.80bn, followed by South Korea with USD 4.52bn in issuance.

Total Issuance and Outstanding for Asia inclusive of Japan, Australia, and New Zealand

Total G3 issuance in Asia (including Japan, Australia and New Zealand) stood at USD 108.27bn in the fourth quarter of 2014, a decline of 13.3% qoq (USD 124.91bn) but a growth of 3.7% yoy (USD 104.38bn). Total HG G3 issuance in Asia (including Japan, Australia and New Zealand) was USD 72.57bn in the fourth quarter of 2014, a decline of 11.3% qoq and 2.0% yoy. HY issuance was USD 6.71bn in the fourth quarter of 2014, a decline of 21.2% and 22.1%, respectively, qoq and yoy. Unrated G3 issuance in Asia was USD 28.99bn in the fourth quarter of 2014, a decline of 16.2% qoq but an increase of 33.6% yoy. For the full year 2014, total G3 issuance in Asia was USD 500.11 billion, a new high, with USD 353.18bn in HG debt, 36.03bn in HY deal, and the balance unrated. Outstanding G3 debt, including developed market Asia, stood at USD 11.94tn at the end of fourth quarter 2014, a decline of 1.2% qoq, with declines in unrated debt (USD 3.27tn, 5.0% decline) but growth in HG debt (USD 8.49tn, 0.3% growth) and HG debt (USD 192.92bn, 0.8% growth).

Domestic CNY Issuance

Total domestic CNY issuance stood at USD 110.27bn in the fourth quarter of 2014, a decline of 30.3% qoq (USD 158.18bn) and 28.1% yoy (USD 174.17bn). By tenor, 56.5% of fourth quarter issuance (USD 62.26bn) would mature in five years or less, followed by the 7 – 10 year bucket (USD 17.28bn). By sector, finance led issuance totals (USD 23.96bn), followed by construction (USD 23.40bn). For the full year, domestic CNY issuance was USD 541.63bn, down from the nearly 1tn of debt issued the year prior (USD 911.90bn in 2013).

About the Report

Done in partnership with ASIFMA, the Asia Credit Report is a quarterly report on the trends and statistics of the Asian bond market, including both the investment grade and high yield bond market. Additional statistics on the G3 and CNH markets are also included.

For more information on ASIFMA’s efforts in Asian fixed income, please visit ASIFMA.

Credits

ASIFMA

• Executive Director, Fixed Income: Vijay Chander

SIFMA Research

• Managing Director, Head of Research: Kyle Brandon
• AVP: Sharon Sung