Banking on the group

Narrowing interest margins will spur demand for syndicated lending in Asia this year and reduce bonds' biggest share of debt capital markets in three years.

The proportion of loans to total debt arranged in the Asia-Pacific region outside Japan shrank to 66 per cent last year, the least since 2009, according to data compiled by Bloomberg.

Corporate bond sales surged 78 per cent to a record US$199.2 billion in 2012, while syndicated bank debt volumes slid 18 per cent to US$378.5 billion.

Rates at which lenders raise capital are falling as bond-buying by central banks to stimulate the world economy boosts the supply of US dollars in the financial system.

That has translated into cheaper loans for companies, with average interest margins for loans denominated in dollars signed this year falling to 319 basis points above the London interbank offered rate, from 358 basis points in the last six months of 2012.

"There's been a huge decrease in bank funding costs over the second half and I think that will result in a 10-15 per cent drop in average in loan pricing across Asia in 2013," said Boey Yin Chong, the Singapore-based managing director of syndicated finance at DBS Bank.