Articles
May 29, 2025
Nonfinancial corporate debt sales up 15.8% in Q1 as issuers repay maturities
29 May, 2025 Nonfinancial corporate debt sales up 15.8% in Q1 as issuers repay maturities By Ranina Sanglap and Uneeb Asim Total nonfinancial corporate debt issuance in Asia-Pacific grew 15.8% year over year in the three months ended March 31 to hit a three-quarter high, as issuers tapped capital markets to repay their upcoming bond maturities. The region's nonfinancial corporates raised $47.12 billion in 349 debt transactions in the first quarter, compared with $40.68 billion in 318 transactions a year ago, according to data compiled by S&P Global Market Intelligence. The first-quarter aggregate was the highest quarterly capital raising since the second quarter of 2024, when issuers raised $52.74 billion. Issuers from the industrials and technology, media and telecommunications (TMT) sectors drove the increase in volumes in the quarter, more than offsetting declines seen in other sectors. Industrials companies raised $10.33 billion versus $5.50 billion a year ago, while TMT companies issued $8.73 billion in the quarter, up from $5.13 billion in the prior-year period. Momentum to continue According to analysts, the momentum in issuance activity will continue in the quarters ahead as companies need to repay their debt. "We expect corporate issuers to continue raising capital in the next few quarters, mainly to repay their upcoming bond maturities," said Desmond Lim, credit analyst at Eastspring Investments. Lim, however, expects growth-related capital raising to be muted in an uncertain macroeconomic environment that dampens investment activities. Given increased uncertainties amid tariff disputes and trade tensions, S&P Global Ratings in late April offered several outcomes from its projections for 2025 bond issuance, rather than single-point projections surrounded by a range. It expects global issuance growth in 2025 to be in the range of -5.3% to 6.2%. Excluding international public finance, the overall range for the issuance growth in 2025 becomes -8.0% to 1.2%, Ratings said in an April 28 report. Global bond issuance in the first quarter amounted to $2.56 trillion, up 4.5% from $2.45 trillion in the first quarter of 2024, according to Ratings. Regional breakdown Nonfinancial corporates in mainland China remained active in the capital markets, raising $17.26 billion in the quarter. That represented an 87.4% increase from the $9.21 billion that issuers raised in the first quarter of 2024, according to Market Intelligence data. Issuance activity in Japan's capital market also saw strong growth in the quarter, as nonfinancial corporates raised $7.27 billion in debt, up from $5.42 billion in the first quarter of 2024. On the contrary, total debt capital raised by South Korean issuers fell 36.6% to $4.39 billion from $6.92 billion a year ago. Corporate issuers will continue "to be sensitive to volatility in the bond markets," particularly to the interest rate environment, when considering new issues, Eastspring's Lim said. "We further expect [Asia-Pacific] issuers to be selective in their choice of funding markets depending on the relative cost of funding," Lim said. "For instance, issuers from certain countries — such as China — may have access to cheaper onshore funding, which may reduce their appetite to issue in the [US dollar] bond market."
