Date
22 November 2017
Asian issuers, particularly Chinese state enterprises, have been rushing to sell euro-denominated debt amid ultra-low interest rates. Photo: Bloomberg
Asian issuers, particularly Chinese state enterprises, have been rushing to sell euro-denominated debt amid ultra-low interest rates. Photo: Bloomberg

Chinese firms lead Asia charge into euro bonds

Asian companies and governments have stepped up bond issuances in Europe to take advantage of rock-bottom interest rates and a weakening euro, the Wall Street Journal reported.

Issuance of euro-denominated bonds from Asia excluding Japan has jumped fivefold so far this year, compared to the same period in 2014, to US$2.29 billion, the report cited Dealogic data as showing.

That comes on top of US$12.7 billion of such debt sold during all of last year, which marked a 43 percent rise from the year before, the report noted.

Chinese state-owned enterprises have been leading the charge into European debt.

Last week, China State Shipping Corp. sold 500 million euro (US$570 million) worth of bonds. Earlier, State Grid Corp. of China and China Construction Bank’s Hong Kong unit sold a combined US$1.63 billion worth of bonds in euros.

Steel giant Baosteel Group, meanwhile, is said to be considering its first euro bond issue.

Asian companies are eager to take advantage of lower borrowing costs in Europe, Jon Pratt, head of debt capital markets in the Asia-Pacific region for Barclays Capital, told the Journal.

“I wouldn’t be surprised if [Asia’s] issue volume in euros quadruples this year from 2014,” he was quoted as saying.

Chinese companies “are also in need of euros as they have done acquisitions or have businesses in Europe,” Pratt said.

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