Asian borrowers have sold a record amount of international bonds so far this year even though the pace of issuance has moderated since early September in the face of US Federal Reserve’s inaction on interest rates, China’s slowing growth, and oil price volatility.
Issuers raised a record $154.7 billion in 309 deals in the first nine months, marginally higher than the $150 billion raised via 294 transactions during the same period last year, according to data provider Dealogic.
Three of the five biggest issuers this year have sprung from the oil and gas sector, placing the recent see-sawing crude prices in stark relief. The largest of the three offerings came to market in April when China Petrochemical Corporation (Sinopec) issued a $6.4 billion multi-tranche note, tapping both the dollar and euro markets for funding.
A month earlier, Malaysia's Petronas raised $5 billion with its first international deal in over five years, while Chinese offshore oil and gas major Cnooc issued a $3.8 billion triple-tranche debt offering.
Oil prices showed signs of a comeback last week, staging a 9% rally. But the price recovery didn't have legs and by Monday profit-taking from last week's bump sent global oil prices tumbling amid renewed concerns about a glut. Opec's monthly output jumped in September to the highest level in more than three years.
US benchmark West Texas Intermediate for November delivery dropped 5.1% last night, or $2.53, to $47.1 a barrel on the New York Mercantile Exchange. The contract posted the largest one-day drop since September 1.
The US dollar meanwhile continues to be the currency of choice for Asian companies, although issuance in euros also jumped significantly.
Among the most notable deals, China tech giant Tencent's $2.5 billion offering grabbed most of the headlines.
According to Dealogic, Asia ex-Japan companies raised a combined $36.7 billion worth of G3 bonds in April, a record-breaking monthly high.