Nonfinancial corporate debt issuance in the Asia-Pacific region rose 27.2% year over year in the quarter ended Sept. 30, totaling $38.14 billion, according to S&P Global Market Intelligence data.

The third-quarter total increased from $29.99 billion in the prior-year period but declined from $52.22 billion raised in the second quarter across 347 transactions.

Energy, utilities and industrials sectors led the annual increase, contributing 43.7% of the third-quarter volume. Companies in energy and utilities raised $8.76 billion, up from $6.22 billion a year ago, while industrials raised $7.90 billion, compared with $4.86 billion in the prior-year quarter.

Consumer and real estate sectors issued $4.21 billion and $2.93 billion in the third quarter, versus $3.74 billion and $5.59 billion a year earlier.

The rise in Asia-Pacific nonfinancial debt issuance aligns with global trends, with issuance remaining robust in 2024 despite higher interest rates and geopolitical challenges. Global bond issuance will likely increase 17% in 2024 to about $9 trillion, followed by a 4% rise in 2025, S&P Global Ratings said Oct. 23.

Through September, global bond issuance reached $7.1 trillion, an 18% increase from $6 trillion at the same time in 2023. Global nonfinancial issuance is forecast to grow 30% in 2024 and 7% in 2025, following an approximately 40% year-over-year surge in the third quarter, according to Ratings.

Bright markets

Australian companies raised $6.56 billion in debt in the third quarter, tripling the prior year's total, according to Market Intelligence data. Hong Kong and Japanese companies also reported strong growth.

Japanese nonfinancial companies raised $5.84 billion in the third quarter, up from $4.42 billion a year earlier but down from $10.64 billion in the second quarter. The decline followed a rush of bond issuance in the second quarter as companies anticipated interest rate hikes, said Haruyasu Kato, fund manager at Asset Management One.

On July 31, the Bank of Japan raised its short-term policy rate to 0.25% from a range of 0% to 0.1%, signaling potential for further rate hikes if wage growth and inflation align, according to Kazuo Ueda, the central bank governor.

Fewer but bigger

While the total value of corporate debt issuance rose, the number of transactions declined year over year in the third quarter, suggesting a shift toward larger deals, according to Market Intelligence data.

Nonfinancial companies completed 20 debt transactions of $500 million or more in the quarter, up from nine a year earlier. Japanese firms led with six large transactions, followed by three each from mainland China, Australia and South Korea.

The largest nonfinancial debt issuance was by China's Poly Developments and Holdings Group Co. Ltd., which raised $1.38 billion.