The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney is part of the Euromoney Institutional Investor PLC
Asiamoney

Asia: Convertible bond sales scale new heights

Rising interest rates and soaring share prices have encouraged issuers to look beyond traditional debt and equity, but the glut of new paper means issuers must be willing to pay.

By John Loh

newheights

After years of struggle, Asia’s equity-linked market is back with a roar.  So far this year, the 40 or so deals priced in the region (excluding Japan and onshore China) have raised a total of $9.7 billion, marking a dramatic increase from a year ago when issuers did 22 deals and raised $1.5 billion, according to Dealogic.

“The boom in equity-linked issuance is long overdue,” says Jennifer Choi, an equity-linked origination banker at Credit Suisse. “The market is finally catching up because of rising rates and the outperformance of share prices.”

Another big catalyst for convertible bonds this year has been the return of China’s property developers, according to Nathan McMurtray, CLSA’s head of equity-linked products. They were the single biggest source of issues before the financial crisis struck in 2008, but have been largely absent over the last decade because of the availability of other, cheaper sources of debt.

Three-year dollar swap rates have climbed about 80 basis points recently, dealing a direct hit to coupon rates on straight bonds, which tend to widen by the same amount.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree