Asean lenders dominate bond sales
Southeast Asian banks dominated regional bond sales as corporate clients sought funding during the busiest year for acquisitions on record.
Southeast Asian banks dominated regional bond sales as corporate clients sought funding during the busiest year for acquisitions on record.
Seven of the top 10 borrowers in the Association of Southeast Asian Nations in the first six months were banks, the most in any half since at least 2007. United Overseas Bank, DBS Group, Krung Thai Bank and Export-Import Bank of Malaysia were among lenders raising US$4.6 billion.
Mergers and acquisitions by Asian corporate buyers rose 19.1 per cent from a year earlier to US$343.4 billion. Banks sold dollar bonds to fund the deals, finance trade and meet stricter Basel III capital rules, taking advantage of record low US borrowing costs.
"Dollar funding costs are relatively cheap and expected to increase," said Adissadikin Ali, the Kuala Lumpur-based CEO of Export-Import Bank of Malaysia.
The Asean bank issuance rose from US$440 million in the second half of 2013 and US$1.97 billion in the first six months of that year. Singapore's UOB raised US$1.24 billion.
"While UOB remains predominantly deposit funded, we believe in diversifying our funding sources to enhance the stability of our liability base," CFO Lee Wai Fai said.
