The rise of domestic debt markets and the fall of G3 issuance has been the big theme in Asian bond markets this year as local markets have proved impressively resilient to the turmoil in global credit markets and demonstrated some newfound maturity. Funding in G3 currencies is on track for it lowest level in five years, while domestic issuance is on track for a record year and the rise of Asia’s local markets looks to be a trend that will continue. Asian borrowers have shown their growing sophis

So far this year ANZ has raised the equivalent of around A$32bn. It has been active in euros, dollars, yen, Australian and New Zealand dollars, Swiss francs and Singapore dollars; increasing the period under review to the past 12 months adds several sterling deals to the mix as well. “Since the onset of the global credit crisis our approach to funding has been to maintain an evenly balanced strategy much as we would do within normal market conditions,” said Rick Moscati, group treasurer at ANZ.

Kexim is one of the savviest borrowers in the region,” said Sean Henderson, head of debt syndicate Asia Pacific at HSBC. “They’ve proven again this year they have significant flexibility to consider almost every global market – and that is a lot more complicated than it looks. “It requires a degree of internal sophistication in understanding a number of different market practises across documentation and execution, as well as an ability to accurately time each currency as opportunities arise.” K

In the debt markets, the starkest confirmation of this change in attitude came in June when the sovereign, the Socialist Republic of Vietnam, spiked plans for a G3 currency issue this year. Last year Barclays Capital, Citi and Deutsche Bank were mandated on a US$750m global bond, but it had been clear for months that the deal was not going to make it across the line. Vietnam’s finance ministry has indicated that the deal will come back at some stage. But both because of the state of the global c

For example, in May Banco de Oro Universal Bank raised Ps10bn, the equivalent of US$235m, in a bond through HSBC, ING and Standard Chartered. The deal, a public offering of Lower Tier 2 notes, was originally planned as a Ps5bn offer, but was doubled after applications reached five times the initial amount. It flew out the door so fast that the public offer on the bond was ended a week early. The coupon attracted investors – at 8.5% on the unsecured subordinated notes, it was higher than some oth

Data from Thomson Reuters attributes 25 deals totalling US$5.9bn to Korean issuers in the first half of the year, significantly less than the 30 deals worth US$10.2bn booked in the same period last year. However, there were just 22 deals totalling US$7.4bn during the same period in 2006 and 16 deals valued at US$6.1bn in same period in 2005. The credit crunch has forced issuers to trim their ambitions in terms of deal size and pricing. Meanwhile, some plans have been put on hold while borrowers

The Malaysian market demonstrated its remarkable resilience when Binariang GSM sealed a chunky M$12bn (US$3.7bn) Islamic MTN in December last year. Despite fears that the size would prove indigestible, the deal went smoothly, reflecting how deep liquidity was and how keen local investors were to diversify from the usual power and toll-road paper. While ample liquidity was a persuasive factor, more pertinent was the savings that foreign issuers could make in the early months of 2008. Korean borro

Westpac was the first out of the gates this year and Australia's fourth-largest bank brought its maiden Samurai issue on January 23. The ¥77bn (US$725m) five-year fixed and floating-rate note came via Nikko Citi, Nomura and UBS. It consisted of a ¥27bn fixed tranche with a 1.54% coupon and a ¥50bn floating note paying 53bp over three-month yen Libor. It came at the tight end of the refined guidance of Libor plus 53bp–54bp. All in all, a good deal. From a Sydney perspective the deal made sense. C

According to the Asian Development Bank (ADB), while India’s stock market capitalisation as a percentage of GDP has grown from 32.1% to 108% since 1996, the bond market has expanded only from 21.3% to 43.4% of GDP. Recent equity market volatility, however, has changed the tide in favour of debt as investors are turning to bond markets for more stable, albeit lower, returns. A recent study by the Associated Chambers of Commerce and Industry of India showed that choppy equity markets had caused in

The numbers tell the story, generating unease among the region’s G3 bankers who are desperately attempting to find reasons to justify their existence. Just US$18.3bn of G3 issuance has been brought in Asia so far this year and if this figure is duplicated in the second half it will mean only US$36bn of total G3 issuance in 2008, versus US$51.5bn last year, and the lowest tally in five years. But with the second wave of the credit crunch recently biting, with US bank stocks and government-sponsor