This year, if the first six weeks are anything to go by, should be a record one in Asian debt capital markets. G3 issuance, up to February 15, was $21.34 billion, compared with $83.4 billion for the whole of last year, according to Dealogic.
After a miserable second half of 2011, the bright start to this year has galvanized the region’s DCM bankers. "We ended January with almost $11 billion of issuance," says Murlidhar Maiya, head of DCM for emerging Asia at JPMorgan. "That’s the best we’ve seen, probably ever. We just printed our 11th deal of the year [on February 1], compared with three dozen in all of last year."
Jon Pratt, head of DCM for Asia Pacific at Barclays Capital, calls it "the busiest start we’ve seen for the G3 bond market in Asia".
What has changed? Part of it is a question of pent-up supply: the second half of last year was all but a write-off, first because of concerns about Chinese governance but mainly because of problems in Europe. So there is already a build-up of issuance, particularly refinancings, that can’t be postponed indefinitely.
However, on top of that, investors cannot stay uninvested indefinitely, and many have seen the new year as an opportunity to put money to work.
