SINGAPORE/HONG KONG : New issuance of dollar bonds in Asia in the first half of 2022 fell to its lowest in three-and-a-half years, as rising interest rates and turmoil in China's property sector spooked investors and companies turned to bank loans to raise funds instead.
Kwan attributed the lower volumes to the war in Ukraine, problems in China's property sector as well as macroeconomic uncertainty around the U.S. Federal Reserve's interest rate rising programme. "Investment grade names have had no issues in financing - they just have to accept the reality that there's a higher cost, ... but a lot of high-yield issuers are going to struggle to refinance their maturing debt," Kwan said.
"We have seen more borrowers pivoting to the loan market... and we expect this trend to continue with rates expected to stay high," said Mildred Chua, head of syndicated finance at DBS.