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Asian corporates to delve deeper into U.S. dollar bond markets

Wed 15th April, 2020 9:43am
By Scott Murdoch
    HONG KONG, April 15 (Reuters) - Asia's international
dollar-based corporate bond market is expected to spring back to
life following Malaysian oil giant Petronas's $6 billion debt
deal - the biggest in the region since coronavirus hit - bankers
and advisers say.
    Dollar bond market sales in the region have significantly
lagged the United States, where bankers say the Federal
Reserve's fiscal stimulus package has led to increased credit
    Since the start of March, there has been $431 billion worth
of corporate bonds sold in the United States compared to just
$31.5 billion in Asia, including Japan, according to Dealogic
    "The rate of issuance in Asia has been modest but the signs
are good, hopefully markets are starting to come back," a debt
banker who worked on Petronas said, but could not be named
because he was not authorised to speak to the media.
    "Issuers are starting to look at whether they can go ahead
with a deal, the amount of phone calls we are taking is
certainly more than it was a few weeks ago."
    A Hong Kong-based lawyer said it was increasingly likely
Asian companies would step up U.S. dollar issuance in the next
few months, especially to repay upcoming debt maturities. 
    Petronas's  PETR.UL  deal was finalised early on Wednesday
and saw the state oil company raise $2.25 billion from a 10-year
tranche, $2.75 billion in 30-year notes and $1 billion from
40-year notes.
    It was the company's first bond deal in five years and a
government statement said the transaction attracted demand from
investors to buy at least $37 billion worth of debt.
    The U.S. dollar deal is the largest from an Asian company
since the coronavirus started to roil financial markets
following the Lunar New Year, in late January, according to
    Lenovo Group  0992.HK , the Chinese owned technology
company, is meeting with investors on the prospect of carrying
out a U.S. dollar bond deal in the next few days, a term sheet
seen by Reuters says.
    However, some companies remain wary of volatile market
conditions, market participants said.
    "U.S. dollar funding is cheap at the moment, rates have been
slashed, it's a good time to be locking it in, but you still see
some companies in this region nervous," said the lawyer who was
not authorised to speak to media.

 (Editing by Jennifer Hughes and Jacqueline Wong)
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