Record-High Fundraising Needed to Plug Q2 APAC Refinancing Gap
Firms in Asia Pacific will need to raise $69.3 billion – a near record-high – to refinance existing loans in the second quarter, according to Refinitv data.
Maturing U.S. dollar debt is set to place pressure on corporates that will need cash flow to combat the crippling economic effects of the ongoing coronavirus pandemic.
APAC bonds have underperformed the broader global market by nearly half with the latter registering a 0.7 percent loss compared to the former’s 1.3 percent loss, according to Bloomberg Barclays Indices. Refinitv’s newly released data follows the $220 billion raised in the U.S. corporate credit market in the last two weeks compared to Asia’s mere $2.57 billion – attributable primarily to Chinese search engine Baidu and insurer AIA which each recently raised $1 billion.
Refinancing Across the Board
Although Asia spells varying levels of economic urgency depending on the specific region, Refinitiv’s data demonstrates refinancing demand across the board.
Chinese state-owned enterprises were unsurprisingly amongst the leaders with a 5-year $2.5 billion bond from oil giant Sinopec Group and a 3-year $898.5 bond from utility firm State Grid both expiring in April. In the same month, a $2.48 billion bond issued by Japan’s Soft Bank Group is maturing on the heels of a planned $41 billion asset sales for share buybacks and debt repayment.
