US dollar bond issuance in Asia hit a record high in the first two weeks of 2020, data showed, as companies and governments took advantage of low interest rates to shore up capital. China's Evergrande, the mainland's third-largest property developer, was the latest to tap investors on Thursday when it launched a deal to raise up to $2 billion to help repay other bonds coming due this year.
In Asia excluding Japan, offshore borrowers have raised $29.15 billion through 52 deals since Jan. 1 - a record for the period, according to data from Dealogic. The data does not include Evergrande's deal which is yet to price.
Companies typically rush to market in January, seeking to tap investors with fresh mandates.
This year's deal flow is "a continuation of a trend that started in the fourth quarter last year with the market benefiting from forecasts of greater stability in US interest rates and a pause in the escalation of trade tensions between the US and China", said Andrew Heathcote, Freshfields Bruckhaus Deringer's head of Asian debt capital markets.
In 2019, during the same time period, $12.5 billion was raised in 33 deals, the data showed. So far this year Chinese companies have accounted for $17.72 billion over 34 deals - more than half of the total. Indonesia's government did the largest deal, raising $3.1 billion, followed by a $2 billion offering from Asian Development Bank, according to Dealogic.
"The US dollar bond market in Asia has seen a very strong start of the year for all issuers and especially in the Chinese real estate sector," Standard Chartered head of Asia bond syndicate, Alan Roch, said.
"With a benign interest rate outlook and a wall of cash in the credit markets, we expect this conducive debt capital market environment to continue," he added.
Evergrande's deal at its stated size would be the largest debt sale by a company so far this year, topping a $1.75 billion offering from aircraft lessor Avolon Holdings, which is controlled by Bohai Capital.
In a statement to the Hong Kong Stock Exchange, Guangzhou-based Evergrande said its chairman, Hui Ka Yan, and CEO Xia Haijun had expressed interest in participating in the deal. Chinese property developers are regular borrowers and at least five have already tapped markets this year.
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