Q3 2024 APAC syndicated loans market overview | Insights
Regardless of the decline in mortgage quantity, the ESG market continues to prosper with inexperienced deal quantity surging by 8% and sustainability-linked mortgage quantity rising by 10% year-over-year for the primary 3 quarters. Debtors’ areas are primarily concentrated in Singapore for inexperienced mortgage issuances whereas most debtors are in Hong Kong for sustainability-linked loans. Oversea-Chinese language Banking Corp continues to steer the mandated lead arranger rating as the highest arranger in each inexperienced loans and sustainability-linked loans market.
Prime 3 offers in Q3 for APAC ex-Japan market are Alipay Hong Kong Holding Ltd for a USD 5 billion 2-tranche facility, Macquarie Group for a USD 2 billion 2-tranche facility, and IFM Australian Infrastructure Wholesale Fund A for an AUD 3 billion (USD 1.95 billion equal) facility. For the primary 3 quarters, Financial institution of China and KB Monetary Group continued their lead within the market by securing the primary and second place respectively in each the bookrunner and mandated lead arranging tables.
ESG
Inexperienced and sustainability-linked lending totaled USD 16.9 billion within the third quarter of 2024 throughout the area, bringing the overall quantity of ESG-related lending to USD 67.8 billion, marking a 9.5% improve in quantity YoY.
Singapore continues its lead because the nation with the most inexperienced loans borrowed, and SGD stays probably the most issued foreign money for inexperienced lending within the third quarter. According to this, most issuance in sustainability-linked loans in Q3 additionally originated from Singapore firms, however Hong Kong nonetheless holds the lead year-to-date. Nonetheless, most issuance of sustainability-linked loans within the area had been denominated in USD and AUD within the third quarter, serving to the AUD to surpass SGD because the fourth most-issued foreign money for SLLs year-to-date.
The biggest sustainability-linked mortgage issued within the third quarter was to April Worldwide Enterprise Pte Ltd, a multi-currency mortgage with CNY and USD tranches totaling USD 1.45 billion. The mortgage attracted 40 lenders from Hong Kong, Singapore, and Taiwan, and carries a set rate of interest of 4.5% on its CNY-denominated tranche, 195 foundation factors and 225 foundation factors over the SOFR for the USD-denominated tranches respectively. Discount in greenhouse fuel emissions stays the preferred KPI throughout the area in Q3, adopted by water consumption.
HSBC stays within the lead as the highest bookrunner for inexperienced loans throughout the area, adopted by Normal Chartered and DBS. Whereas United Abroad Financial institution was the main arranger for inexperienced loans within the third quarter, Oversea-Chinese language Banking Corp remains to be the highest mandated lead arranger year-to-date, with United Abroad Financial institution following intently behind and DBS in third. On this planet of sustainability-linked loans, whereas HSBC as soon as once more leads as the highest bookrunner within the APAC ex-Japan area this previous quarter, Mega Monetary stays the highest bookrunner year-to-date, with Taipei Fubon and China Development Financial institution not far behind. Amongst the mandated lead arrangers for sustainability-linked loans within the area, Oversea-Chinese language Banking Corp stays the highest arranger year-to-date, and HSBC, who introduced within the largest quantity of offers in Q3, follows intently behind.
Better China
Better China syndicated loans within the first 3 quarters of 2024 dropped from 51% to 47% in APAC ex-Japan syndicated lending. China and Hong Kong continued to dominate the APAC ex-Japan market, accounting for round 41% of the overall lending quantity. Refinancing was the primary driver on 36.6% of the overall lending within the Better China market. The biggest refinancing deal was issued by Alipay totaling USD 5 billion with a 3-year tenor. In the meantime, syndicated loans with undertaking finance functions surged from round USD 10 billion to USD 19.54 billion (92.9%) year-over-year. Important offers from this quarter had been from Ruian Expressway Funding, Kunshan Jinqiandeng City Development and Shanghai Caojing Second Energy Era.
Debtors from the actual property sector contributed to many of the lending (29.1%), which was primarily attributed to HKD 23 billion 5-year borrowing issued by Solar Hung Kai Properties and CNY 20.6 billion 15-year borrowing issued by Shanghai Bund City Renewal Funding Improvement. Loans being denominated in CNH elevated – leaping from 2% to 7% of the overall lending in China offshore market in comparison with the identical interval final yr. The Individuals’s Financial institution of China (PBOC) not too long ago introduced their plans on a number of charge cuts together with mortgages and launching housing insurance policies in the identical month. It’s anticipated these measures might enhance China’s sluggish economic system and housing sector. But, with the US rate of interest reduce, borrowing foreign money might probably tilt to USD away from RMB as a result of a smaller rate of interest distinction between these two currencies than earlier than.
ASEAN
Syndicated borrowing amongst ASEAN debtors within the first 3 quarters noticed a slight restoration, from down 39.7% YoY by finish of H1 to down 24.0% YoY by finish of Q3. Whereas the quantity remains to be down, it’s consistent with the broader APAC area. The momentum of sturdy demand from ASEAN debtors in 2023 didn’t carry over into 2024. Greater than half of the mortgage provide got here from refinancing wants, sitting at 53.9% of the overall mortgage quantity. Regardless of the speed reduce choice delivered by FED and projected future downward charge developments, ASEAN debtors are nonetheless cautious in elevating funds for tasks and CapEx functions on the whole. A notable undertaking finance deal was for constructing Vietnam Lengthy Thanh Worldwide Airport with USD $1.8 billion and a 20-year tenor.
The biggest deal signed on this quarter and yr thus far is issued by Trafigura for refinancing functions. It’s signed with a dual-currency USD-CNH in a 3-tranche construction, totaling USD 3.2 billion equal. With the restricted provide of loans within the area this yr, regional lenders are desperate to finance loans from top quality issuers. Deal was considerably oversubscribed and upsized from the preliminary launch of USD 2.0 billion equal. Over 38 banks participated within the deal, with DBS, First Abu Dhabi Financial institution and Normal Chartered Financial institution because the energetic MLABs. The deal can be stated to be an SLL in keeping with the official press launch, making this the biggest SLL deal YTD.
Among the many mandated lead arranging banks, United Abroad Financial institution overtook friends and ranked prime, adopted intently by DBS and Abroad Chinese language Banking Corp, making up market shares of 8.7%, 8.7% and eight.6% respectively. Among the many bookrunners, SMBC claimed the highest spot, adopted by United Abroad Financial institution and Oversea-Chinese language Banking Corp, with market shares of 11.4%, 8.7%, and eight.4% respectively.
South Korea
South Korea’s loans market totaled 173 offers, price USD 35.1 billion within the first three quarters of 2024. With a rise of 9.7% in complete deal quantity in comparison with the identical interval final yr, South Korea is extra energetic than the remainder of the APAC area which was down by greater than 20%.
Following the momentum of the second quarter, actual property financing on this quarter nonetheless seems to be the largest mortgage use of proceeds for the home borrower’s desk. Certainly, South Korea’s actual property financing quantity is the biggest in APAC in, accounting for about 31% of APAC’s actual property market quantity in 2024. Moreover, as South Korea’s M&A market is surging with deal quantity in Q3, the acquisition financing market can be anticipated to point out indicators of restoration.
For 2024 Q3 yr thus far mandated lead arranger rating, KB Monetary Group continued to say the highest spot with 37.4% of the market share, adopted by Shinhan Monetary Group with 27.5%. Lee & Ko ranked the highest authorized agency for each the Authorized Adviser – Lender desk and the Authorized Adviser – Borrower desk.