Chinese Financial Institutions Help Global Private Debt Issuance Rise on a Yearly Basis

Chinese issuers, Japanese primary market volumes and European nonfinancial corporations helped contribute to a 28% rise in global private debt issuance to some $1 trillion compared with the same time a year ago, though the figure is slightly down from the previous three months.

Advanced economy issuers increased new bond supply by 22% year-over-year to $664 billion, but the total was 10% lower on the quarter, said Rahul Ghosh, vice president and senior credit officer with Moody’s Investors Service, in a new report.

"Over the third quarter, total issuance grew in emerging markets, but was 10% lower in advanced economies on the quarter," Ghosh said. "Primary market volumes in North America were broadly at levels seen a year ago, with muted issuance by nonfinancial corporations in Q3 after a busy second quarter offset by stronger activity from financial institutions. In contrast, Europe primary markets saw higher placements from the non-financial sector, boosted by United Kingdom issuers returning to primary markets after a referendum lull."

In North America, nonfinancial corporate issuance was 6% lower year-over-year and down 30% from the second quarter, mostly because of subdued investment-grade volumes, Moody’s analysts said. Financial institutions, however, saw issuance rise yearly by 20% and 2% on a quarterly basis.

In the UK, deal volumes from nonfinancial companies doubled in dollar terms, while financial institutions raised most of their new bond debt in the third quarter of this year, Ghosh said.

Meanwhile in emerging markets, total issuance increased by 43% year-over-year and 16% by the quarter to $342 billion. “One of the key drivers behind this rise was higher Chinese issuance, particularly from financial institutions,” he said.

- Nicholas Stern, editorial associate

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