Asian Development Bank and Asian Infrastructure Investment Bank helped drive aggregate debt raised by Asia-Pacific banks to a three-month high in January.
The region's banks raised $18.48 billion in debt in January, almost six times the $3.46 billion raised in December 2023, according to data compiled by S&P Global Market Intelligence on a best-effort basis. Including equity capital, banks raised $18.88 billion of capital in January. The aggregate debt figures covered in the analysis include bonds, senior debt and preferred securities.
January's uptick follows a year in which investor sentiment and negative economic growth prospects pushed total debt and equity issuance volume to an 11-year low of $238.10 billion, Market Intelligence data shows.
Debt issuance in the coming months could be driven by major mainland Chinese banks as they near a Jan. 1, 2025, deadline to meet total loss-absorbing capacity requirements. The four globally systemically important banks have an estimated $550 billion capital gap to fill in order to meet the requirement, S&P Global Ratings said in January 2023.
Multilateral developments banks
Multilateral development banks, led by Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB), actively tapped capital markets during the month and accounted for 75% of the total issuance, according to the data.
ADB's dual-tranche, $5 billion US dollar-denominated bond was the largest offering in January, followed by AIIB's $3 billion sustainable development bond. ADB said in a Jan. 5 statement that proceeds of the three- and 10-year bonds will be part of the bank's ordinary capital resources used to promote social and economic development across Asia and the Pacific. The Philippines-headquartered bank also said it plans to raise about $30 billion to $34 billion from capital markets in 2024.
Both the banks issued bonds denominated in different currencies, including the US dollar, British pound sterling and euro.
Other notable offerings in the region included National Australia Bank Ltd.'s $750 million US dollar-denominated bonds, and two in South Korea; Shinhan Bank's $540 million euro-denominated bond and Woori Bank's $400 million US dollar bonds.
Tepid equities raising
Equity issuance by banks in Asia-Pacific plunged to its lowest level in at least 13 months in January to $400 million.
Notable offerings in January included Oversea-Chinese Banking Corp. Ltd.'s $336 million convertible bond and Japan-based Resona Holdings Inc.'s $63.38 million follow-on offering.
