Asia Credit Report, First Quarter 2016

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

Total issuance in 1Q’16 came in at USD 34.2 billion (bn) as of March 31, up 14.3% quarter-over-quarter (qoq) from 4Q’15 (USD 29.9bn) but down 30.8% year-over-year (yoy), inclusive of high grade (HG), high yield (HY), and unrated deals. EM issuance overall has been very weak, with total issuance of USD 120.9bn in 1Q’16 (according to Dealogic data) down 19% on a yoy basis and the lowest total since 2010 (although the return of Argentina as a major EM sovereign debt issuer in 2Q’16 is likely to give a strong boost to EM bond issuance totals for the second quarter).

Domestic CNY Issuance

Total domestic CNY issuance stood at USD 180.1bn in the first quarter of 2016, down 4.0% from fourth quarter volume (USD 187.6bn) but an increase of 146.2% yoy (USD 73.2bn). By tenor, 71.1% of first quarter issuance (USD 128.1bn) would mature in five years or less, followed by the 5-7 year bucket (USD 26.3bn, or 14.6% of issuance). By sector, finance led issuance totals (USD 39.9bn), followed by real estate (USD 33.9bn).

Offshore Renminbi (CNH) Issuance

The pace of issuance slowed sharply on a qoq basis in the first quarter. For the first quarter of 2016, an equivalent of USD 3.6bn in CNH bonds were issued, a decline of 58.1% qoq and a 55.1% yoy. In terms of tenor, nearly all of first quarter issuance (97.0%) accounted for by transactions with tenors of 5-years or less and nearly a third from short-term paper (USD 1.0bn). HG deals rated AA totaling USD 208.5mn had the highest share among rated deals (5.8%). In terms of sector, real estate sector transactions totaling USD 1.8bn accounted for the largest volume of deals by sector (51.1%), followed by finance, totaling USD 1.5bn (representing 40.4% 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