BEIJING: China’s US dollar-bond market is seeing a return of big issuers, raising hopes that a market hit hard in recent years by the nation’s economic woes is reviving.
Chinese companies issued a combined US$7.77bil of US dollar bonds in October, more than doubling from a year earlier, according to data compiled by Bloomberg.
The momentum has extended into this month, with Alibaba Group Holding Ltd planning to issue such notes for the first time since 2021 and Fosun International Ltd among issuers in November.
Last week, China’s Finance Ministry also tapped the market for the first time in three years.
The US dollar bond market’s revival came as investors’ growing confidence about the Chinese economy, following Beijing’s stimulus blitz, triggers bond-issuance costs to fall.
Yield premiums on US dollar securities in Asia fell to all-time lows in recent weeks, after China’s rescue plan for the economy boosted the appeal of the emerging market’s debt.
China US dollar bond issuance is picking up over the past couple of months partly because the country’s investment-grade spreads are at the tightest on record, which offers “cost savings for high-quality issuers”, said Zerlina Zeng, head of East Asia corporate research at Creditsights Singapore LLC.
In recent years, China’s property crisis had hurt investors’ confidence in the country’s US dollar-denominated bonds. Demand was also capped by high borrowing cost in the US dollar, which encouraged issuers to raise funds in the Chinese yuan. — Bloomberg
