Asian dollar bond issuance is projected to rise by approximately 20% in 2025 compared to the previous year, driven by a surge in Chinese debt deals and the prospect of U.S. interest rate cuts making dollar bonds more attractive than local currency debt for companies.
In the opening days of 2025, over $6 billion in dollar bonds were issued, according to data from LSEG and term sheets reviewed by Reuters. Notable deals included issuances from the Export-Import Bank of Korea and China Hongqiao Group, a major aluminum producer.
“We anticipate about a 20% increase in dollar bond issuance from Asia, excluding Japan and Australia, reaching an estimated $220-$225 billion in 2025,” said Rishi Jalan, head of Asia Pacific debt syndicate at Citigroup (NYSE:C). In comparison, $175 billion in dollar bonds were issued in 2024.
“To hit that target, significant activity will be required across various sectors,” Jalan added. “This includes large-scale issuances from major Chinese tech firms, a rebound in Indian dollar issuance, and a shift back from local currency to dollar bonds.”
The rise in dollar bond issuance is expected to support Asian companies’ expansion efforts while boosting fees for investment banks managing these deals.
For much of the past two years, higher U.S. interest rates had made it cheaper for many Asian companies to rely on local currency bonds or domestic bank loans. However, the U.S. Federal Reserve reduced its policy rate by a full percentage point across its last three meetings of 2024, with rates currently at 4.25% to 4.5%. Analysts expect the Fed to maintain this range during its meeting on Jan. 28-29.
China’s technology giants are expected to lead the growth in dollar bond issuance this year. In late 2024, e-commerce leaders Alibaba (NYSE:BABA) and Meituan raised a combined $7.5 billion through dollar bonds, partially to refinance debt and secure capital for future expansion. Bankers predict this trend will persist into 2025.
Driving Factors
China remains a key driver of Asia’s dollar debt market, issuing $77.1 billion in dollar bonds in 2024—a sharp 81% increase from the $42.5 billion issued in 2023, according to Dealogic. Despite this growth, the figure is still well below the 2019 peak of $210.5 billion.
“High-grade Chinese firms are now more comfortable with current interest rate levels compared to 2023 and the first half of 2024, which is enabling them to issue debt,” said Avinash Thakur, Barclays’ (LON:BARC) head of capital markets financing for Asia Pacific.
He noted expected issuances from the technology and industrial sectors to meet funding needs. However, the country’s troubled property sector—previously a significant issuer of high-yield bonds—remains unlikely to return to the market soon due to ongoing financial instability.”The sector remains under pressure, with property prices continuing to decline and debt levels remaining elevated,” Thakur said.
In other parts of the region, South Korea’s dollar bond issuance grew by 14.5% in 2024, reaching nearly $50 billion. However, ongoing political instability could deter investors from pursuing deals in the market, according to Jini Lee, a partner at the law firm Ashurst.
“Investors seeking to diversify away from U.S. investments and looking toward Asia may have considered markets like India and Korea,” Lee explained. She added that with growing skepticism toward China, other Asian markets have gained favor among international investors.
“Some investors might prefer to wait for South Korea’s political situation to stabilize before committing to investments, which could lead to a slightly subdued market in the near term,” she noted.
