Emerging market issuance outperforming year-ago pace, fueled by growth from Asia borrowers

Chicago, Feb. 12 – Emerging markets bond underwriters continue to be busy in the new year with issuance numbers continuing to soar year over year, led by supply from Asia.

Emerging markets issuance is up approximately 20% in 2021 versus issuance at the same point in mid-February a year ago.

Prospect News started actively tracking emerging markets bonds in 2004.

In that timeframe, from 2004 to 2020, 2020 had the highest number of deals and largest nominal amount of issuance with $727.75 billion in 1,278 tranches.

By Feb. 12 in 2020, issuers had sold $127.71 billion of major-currency debt from 202 deals.

2021 has already posted $154.16 billion from 255 tranches, according to Prospect News’ data.

Breaking down the issuance by country a bit, China – far and away the country that has been issuing the most bonds in the emerging markets sector – is running far ahead of its issuance statistics year over year and could single-handedly nearly account for the annual increase.

Between Jan. 1, 2020 and Feb. 12, 2020 Chinese issuers released $25.53 billion of new paper into the market in 56 deals or tranches.

Moving to this year, issuers in mainland China have sold $47.58 billion of debt from 106 tranches, accounting for 30.37% of the market.

Hong Kong’s numbers are up, too. Hong Kong-based issuers sold $5.61 billion of new debt in 14 transactions in the first month and a half of last year; Hong Kong-based issuers have produced 29 deals so far this year totaling $12.23 billion.

For all of 2020, issuers out of mainland China and Hong Kong accounted for 33.91% of the market.

From Jan. 1 to Feb. 12 in 2021, issuers from China and Hong Kong have accounted for 38.18% of issuance.

Regionally, Indonesian issuance is nearly flat at around $7 billion and issuers from India have actually sold less, although there are a few deals to be added soon which will alter that viewpoint including expected offerings from India Toll Road, India Green Power Holdings and Export-Import Bank of India.

Korean issuers are also driving up Asian sector totals.

For all of 2020, Korean issuers sold $27.14 billion of bonds, and for the first month and a half of 2021 issuers out of Korea sold $12.52 billion of bonds in 22 transactions.

Many of those deals have been financial or bank issuers, including KEB Hana Bank, Kookmin Bank, Export-Import Bank of Korea (Kexim), Korea Development Bank and Woori Bank.

© 2015 Prospect News.
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