On January 5, 2025, Asia Pacific borrowers initiated a significant week for global bond issuance, with at least 12 issuers planning to sell dollar-denominated debt. Key participants in this wave include Mitsubishi UFJ Financial Group Inc., China Hongqiao Group Ltd., and the Export-Import Bank of India. The market is currently buoyed by low global credit spreads, which are at their lowest in 17 years, and a forecast of around $50 billion in high-grade issuance in the U.S. [6a7a548f]
Among the notable borrowers, Chugoku Electric Power Co. has mandated banks for potential sales, indicating a robust interest in capitalizing on favorable market conditions. BlackRock's Navin Saigal expressed optimism for Asian high-yield credit, highlighting the restrained supply and attractive yields of 6-7%. However, concerns over inflation, particularly in light of President-elect Donald Trump's policies, may influence investor behavior moving forward. [6a7a548f]
Asian dollar bond spreads have decreased alongside U.S. peers, supported by Chinese economic stimulus measures and regional interest rate cuts. Yield premiums on Asian investment-grade bonds are currently at their lowest in 15 years, reflecting a positive sentiment among investors in the region. This trend suggests a growing confidence in the Asia Pacific bond market, even as global economic uncertainties persist. [6a7a548f]