Battle between loans and bonds offers rewards

The complementary nature of loans and bonds enables issuers to improve their bargaining power, lowering overall funding costs.

Although bonds are in general more costly than loans, accessing these two forms of financing can drive down overall cost of funding for an issuer, according to panelists at Haymarket’s fifth Annual Borrowers Investors Forum, North Asia.

Held in Hong Kong on Thursday, the conference revealed poll results that illustrated a heavier preference for bond financing 59% versus loans 41%, and for obvious reasons the former is able to offer companies access to deeper pools of liquidity depending on the currency and funding at longer tenors of more than five years. The sweet spot for loans is around three years, highlight experts.

Although bonds are much...

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