Latest news with #debtissuance
CNA
2 days ago
- Business
- CNA
Global government issuance of US dollar debt tumbling in 2025, data shows
Governments in Asia and Europe are raising far less debt in U.S. dollars than usual, preferring to issue at home as they avoid exposure to rising U.S. yields, currency volatility and broader concerns about U.S. government finances. According to Dealogic data, issuance of dollar bonds by non-U.S. sovereigns dropped 19 per cent to $86.2 billion in the first five months of this year compared with the same period last year, marking the first decline in three years. The January-May dollar bond issuance by the governments of Canada and Saudi Arabia fell 31 per cent and 29 per cent to $10.9 billion and $11.9 billion, respectively, while issuance by Israel and Poland declined 37 per cent and 31 per cent to $4.9 billion and $5.4 billion. At the same time, Dealogic data showed global sovereigns' local currency bond issuance had climbed to a five-year high of $326 billion so far this year. This drop in dollar bond issuance comes at a time when global investors are pulling back from U.S. assets, partly in response to tariffs and as they question U.S. financial dominance and safety. Johnny Chen, portfolio manager at William Blair's emerging markets debt team, said the rise in local currency issuance is largely driven by falling domestic interest rates as inflationary pressures ebb, noting that India, Indonesia and Thailand have all cut their benchmark interest rates this year. "In India's case, the local currency debt market has also matured further with the inclusion of Indian local currency debt in global bond indices. This development has likely expanded the investor base, prompting more local currency issuance in 2025," he said. Brazil is considering issuing its first sovereign bonds in yuan, two government sources said, after President Luiz Inacio Lula da Silva's visit to Beijing concluded with a wave of Chinese investment announcements and a currency swap agreement. Brazil's sovereign U.S. dollar bond issuance has dropped 44 per cent to $2.4 billion this year, data showed. Saudi Arabia raised 2.25 billion euros ($2.36 billion) through a euro-denominated bond sale, including its first tranche of so-called green bonds, as part of its global medium-term note program, aligning with its strategy to diversify away from dollar-linked financing. "The challenge with the onshore local currency is that those issuances tend to be much smaller, they're less liquid," said Kenneth Orchard, head of international fixed income at T. Rowe Price, based in London."But we think over time there are going to be more international investors in those markets."
Yahoo
2 days ago
- Business
- Yahoo
Global government issuance of US dollar debt tumbling in 2025, data shows
By Patturaja Murugaboopathy and Jiaxing Li (Reuters) -Governments in Asia and Europe are raising far less debt in U.S. dollars than usual, preferring to issue at home as they avoid exposure to rising U.S. yields, currency volatility and broader concerns about U.S. government finances. According to Dealogic data, issuance of dollar bonds by non-U.S. sovereigns dropped 19% to $86.2 billion in the first five months of this year compared with the same period last year, marking the first decline in three years. The January-May dollar bond issuance by the governments of Canada and Saudi Arabia fell 31% and 29% to $10.9 billion and $11.9 billion, respectively, while issuance by Israel and Poland declined 37% and 31% to $4.9 billion and $5.4 billion. At the same time, Dealogic data showed global sovereigns' local currency bond issuance had climbed to a five-year high of $326 billion so far this year. This drop in dollar bond issuance comes at a time when global investors are pulling back from U.S. assets, partly in response to tariffs and as they question U.S. financial dominance and safety. Johnny Chen, portfolio manager at William Blair's emerging markets debt team, said the rise in local currency issuance is largely driven by falling domestic interest rates as inflationary pressures ebb, noting that India, Indonesia and Thailand have all cut their benchmark interest rates this year. "In India's case, the local currency debt market has also matured further with the inclusion of Indian local currency debt in global bond indices. This development has likely expanded the investor base, prompting more local currency issuance in 2025," he said. Brazil is considering issuing its first sovereign bonds in yuan, two government sources said, after President Luiz Inacio Lula da Silva's visit to Beijing concluded with a wave of Chinese investment announcements and a currency swap agreement. Brazil's sovereign U.S. dollar bond issuance has dropped 44% to $2.4 billion this year, data showed. Saudi Arabia raised 2.25 billion euros ($2.36 billion) through a euro-denominated bond sale, including its first tranche of so-called green bonds, as part of its global medium-term note program, aligning with its strategy to diversify away from dollar-linked financing. "The challenge with the onshore local currency is that those issuances tend to be much smaller, they're less liquid," said Kenneth Orchard, head of international fixed income at T. Rowe Price, based in London."But we think over time there are going to be more international investors in those markets." (Reporting By Patturaja Murugaboopathy in Bengaluru and Jiaxing Li in Hong Kong; Additional reporting by Gaurav Dogra in Bengaluru; Editing by Hugh Lawson)
Yahoo
2 days ago
- Business
- Yahoo
Global government issuance of US dollar debt tumbling in 2025, data shows
By Patturaja Murugaboopathy and Jiaxing Li (Reuters) -Governments in Asia and Europe are raising far less debt in U.S. dollars than usual, preferring to issue at home as they avoid exposure to rising U.S. yields, currency volatility and broader concerns about U.S. government finances. According to Dealogic data, issuance of dollar bonds by non-U.S. sovereigns dropped 19% to $86.2 billion in the first five months of this year compared with the same period last year, marking the first decline in three years. The January-May dollar bond issuance by the governments of Canada and Saudi Arabia fell 31% and 29% to $10.9 billion and $11.9 billion, respectively, while issuance by Israel and Poland declined 37% and 31% to $4.9 billion and $5.4 billion. At the same time, Dealogic data showed global sovereigns' local currency bond issuance had climbed to a five-year high of $326 billion so far this year. This drop in dollar bond issuance comes at a time when global investors are pulling back from U.S. assets, partly in response to tariffs and as they question U.S. financial dominance and safety. Johnny Chen, portfolio manager at William Blair's emerging markets debt team, said the rise in local currency issuance is largely driven by falling domestic interest rates as inflationary pressures ebb, noting that India, Indonesia and Thailand have all cut their benchmark interest rates this year. "In India's case, the local currency debt market has also matured further with the inclusion of Indian local currency debt in global bond indices. This development has likely expanded the investor base, prompting more local currency issuance in 2025," he said. Brazil is considering issuing its first sovereign bonds in yuan, two government sources said, after President Luiz Inacio Lula da Silva's visit to Beijing concluded with a wave of Chinese investment announcements and a currency swap agreement. Brazil's sovereign U.S. dollar bond issuance has dropped 44% to $2.4 billion this year, data showed. Saudi Arabia raised 2.25 billion euros ($2.36 billion) through a euro-denominated bond sale, including its first tranche of so-called green bonds, as part of its global medium-term note program, aligning with its strategy to diversify away from dollar-linked financing. "The challenge with the onshore local currency is that those issuances tend to be much smaller, they're less liquid," said Kenneth Orchard, head of international fixed income at T. Rowe Price, based in London."But we think over time there are going to be more international investors in those markets." (Reporting By Patturaja Murugaboopathy in Bengaluru and Jiaxing Li in Hong Kong; Additional reporting by Gaurav Dogra in Bengaluru; Editing by Hugh Lawson) Sign in to access your portfolio
Zawya
3 days ago
- Business
- Zawya
Egypt: EFG Hermes advises on EFG Corp-Solutions' $52mln bond issuance
Arab Finance: EFG Hermes, an investment bank in the Middle East and North Africa (MENA) and a subsidiary of EFG Holding, has concluded advisory on an EGP 2.65 billion corporate bond issuance for EFG Corp-Solutions, as per an emailed press release. A subsidiary of EFG Finance, EFG Corp-Solutions is a company specializing in leasing and factoring in Egypt. This marks its fourth bond issuance. The bond, issued with a credit rating of A- from Middle East Ratings and Investor Services (MERIS), has a 13-month tenor. For this issuance, EFG Hermes acted as the financial advisor, transaction manager, bookrunner, underwriter, and arranger. Commercial International Bank (CIB) was the placement and subscription bank, while Dreny & Partners provided legal advisory services. KPMG served as the auditor. EFG Hermes continues its involvement in debt issuances in the region, having recently advised on several transactions, including Bedaya's sixth securitization issuance valued at EGP 1.64 billion and Valu's 15th securitized bond issuance worth EGP 1.036 billion. Other advisory work includes Bedaya's fifth securitization at EGP 1.78 billion, Sylndr's EGP 370 million working capital facility, and a short-term note issuance of EGP 433 million for EFG Corp-Solutions. © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
3 days ago
- Business
- Zawya
Kuwait could issue debut debt tranche before Eid
With plans to borrow up to $20 billion during the current fiscal year, Kuwait could issue its first tranche of debt very soon possibly even before the Eid al-Adha holidays— after the OPEC oil producer last week authorised its multi-billion sovereign wealth fund, and the central bank to borrow funds. The Ministry of Finance has approved the Kuwait Investment Authority (KIA) to borrow in major foreign currencies on global markets, while the Central Bank of Kuwait (CBK) has been authorised to raise debt in domestic markets. 'All the signs are that the first issuance will come soon, maybe even before Eid al-Adha,' Justin Alexander, Director, Khalij Economics, told Zawya. He noted that the issuance could proceed despite less-than-ideal market conditions, including rising US Treasury yields driven by tariffs, a Moody's downgrade, and fiscal concerns surrounding US President Donald Trump's 'Big Beautiful Bill.' 'However, it's not clear that things will get better as the year progresses, so I expect there will be a sizable debut issuance, maybe around the $5 billion range, but it could easily be double that--Saudi Arabia and Qatar have made $10 billion-plus issuances in the past,' Alexander added. The green light for the KIA and CBK follows Finance Ministry Undersecretary Faisal Al-Muzaini's announcement last week that Kuwait plans to borrow between 3 and 6 billion dinars (approximately $10–20 billion) from international and local markets during the 2025/2026 fiscal year. Public debt In March, Kuwait issued a public debt decree, allowing the government to issue financial instruments with maturities of up to 50 years and setting a debt ceiling of KWD 30 billion ($98 billion) in major convertible foreign currencies. According to Fitch Ratings, this represents around 62% of the country's GDP. S&P Ratings projects that gross general government debt will rise to about 17% of GDP by 2028, up from 3% in 2024. Kuwait, which holds around 7% of the world's hydrocarbon reserves, relies on oil revenues for up to 87% of its income. OPEC+ production cuts have reduced Kuwait's oil exports and, consequently, its revenue. A think tank has suggested that Kuwait may need an average oil price of $100 per barrel to finance its growing budget deficit in the coming years. Junaid Ansari, Director of Investment Strategy and Research at Kuwait-based Kamco Invest, believes the borrowing plan is not a direct response to falling oil prices but part of a broader long-term strategy. 'The strategy is aimed at having a presence in the debt market, develop a sovereign yield curve and provide a basis for firms in the country to raise funds. We believe that all governments in the GCC are aiming to delink debt issuances with the changes in oil prices to have a much more stable, sustainable and long-term fiscal strategy. It would also be positive for the sovereign rating as it removes ambiguity with respect to government's funding plans,' he said. Alexander noted that Kuwait could have continued using fiscal maneuvers to tap the Reserve Fund for Future Generations managed by the KIA by selling assets to it. 'But it's much cleaner to use debt financing, especially since borrowing costs are likely lower than the KIA's internal rate of return,' he said. Kuwait's last debt issuance was in 2017, just before the previous debt law expired. Efforts to pass a new law allowing a return to debt markets had been stalled for years due to political gridlock between parliament and the cabinet. Despite Kuwait's strong sovereign ratings (AA- by Fitch and A+ by S&P, both with stable outlooks) and low public debt levels, challenges remain. These include a lack of predictability and transparency, and weak implementation of fiscal reforms. Investor interest is high Still, Alexander said investor interest in Kuwait remains high. 'Although there are plenty of concerns about Kuwait, its very low debt stock and huge pool of foreign assets mean that investors are likely to be very comfortable holding Kuwaiti debt. The spreads will be tight, closer to Abu Dhabi than Saudi Arabia (which has the same average rating as Kuwait but a far weaker net asset position), but demand should be solid as a diversification play for those investing in regional debt.' According to S&P Global, Kuwait's debt stood at about 3% of GDP at the end of 2024, primarily comprising a $4.5 billion Eurobond maturing in 2027. Domestic debt is minimal, at around 0.1% of GDP. (Reporting by Brinda Darasha; editing by Seban Scaria)
