Market Overview and Highlights of Asia (ex-Japan, Australia and New Zealand) debt issuance in Second Quarter 2016

Total issuance in 2Q’16 came in at USD 58.8 billion (bn) as of June 30, up 64.1% quarter-over-quarter (qoq) from 1Q’16 (USD 36.4bn) but down 7.2% year-over-year (yoy), inclusive of high grade (HG), high yield (HY), and unrated deals. Turning to emerging markets (EM) overall, one interesting highlight of the quarter is that the largest and the third-largest EM transactions ever, the Argentina sovereign USD 16.5bn issue and the Qatar sovereign USD 9.0bn issue were both priced during the quarter – giving a boost to total EM bond issuance which started the year on a relatively lackluster note.

Domestic CNY Issuance

Total domestic CNY issuance stood at USD 150.1bn in the second quarter of 2016, down 37.0% from first quarter volume (USD 238.5bn), but an increase of 6.3% yoy (USD 141.2bn). By tenor, 67.2% of second quarter issuance (USD 100.8bn) would mature in five years or less, followed by the 5 – 7 year bucket (USD 24.6bn, or 16.4% of issuance). By sector, real estate led issuance totals (USD 30.5bn), followed by construction (USD 29.2bn).

Offshore Renminbi (CNH) Issuance

The pace of issuance picked up on a qoq basis in the second quarter. For the second quarter of 2016, an equivalent of USD 7.3bn in CNH bonds were issued, an increase of 311.2% qoq but a decline of 18.2% yoy. In terms of tenor, nearly all of first quarter issuance (94.8%) accounted for by transactions with tenors of 5-years or less and half of all issuance was from short-term paper (USD 3.7bn). HG deals rated A+ totaling USD 791.1mn had the highest share among rated deals (10.9%). In terms of sector, finance transactions totaling USD 4.0bn accounted for the largest volume of deals by sector (55.1%), followed by sovereigns, totaling USD 2.6bn (representing 35.3% of issuance).

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
• Intern: Arun Kalyanaraman