Citi Anticipates a 20% Surge in Asian International Bond Issuance in 2024

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Citigroup (Citi) anticipates a surge in international bond issuance in Asia, excluding Japan, with expectations set at $160 billion for 2024, marking a 20% increase from the $130 billion recorded in 2023. The year has already witnessed nearly $15 billion in issuances by January.

Rishi Jalan, Head of Debt Syndicate at Citi Asia, expressed optimism about the robust beginning to the year, citing factors that are poised to bolster both supply and demand throughout 2024. The projection of a 20% rise in issuance indicates the positive trajectory foreseen for the coming months.

Market sentiment suggests that the interest rate cycle is reaching its peak, with widespread expectations of rate cuts by the Federal Reserve in the current year. This scenario allows certain issuers to secure lower yields/coupon rates on their transactions, providing an opportunity for investors to capitalize on portfolio gains amid declining yields.

A substantial refinancing requirement of $250 billion is anticipated for Asia issuers in the G3 bond markets in 2024, although not all of this is expected to return to the bond market. In the preceding year, 2023, redemptions amounted to $217 billion, with new issuances totaling $126 billion. This dynamic landscape reflects the ongoing shifts in the region’s bond markets, with a promising outlook for the year ahead.