Trump is planning a series of so-called reciprocal taxes, hitting countries that impose their own levies on US goods
[CHICAGO] The countdown to US President Donald Trump’s next round of tariffs has fuelled a frenzy of activity in Asia Pacific’s credit market, with more than a dozen issuers marketing or announcing US dollar bonds on Monday (Mar 24).
Korea National Oil Corporation is among the borrowers planning to price a bond on Monday, while Malaysian oil giant Petroliam Nasional has hired banks for what could be its first US dollar issuance in almost four years. South Korean steelmaker Posco Holdings, Philippine restaurant operator Jollibee Foods and Hong Kong metro operator MTR Corporation are among the other issuers working on deals.
They are turning to the bond market before a hotly-anticipated US tariff announcement on Apr 2, which Trump has referred to as “Liberation Day”. Although the threat of rising tariffs has made investors nervous, it has not been entirely bad news for bond issuers: Treasury yields have fallen as investors weigh up the economic impact, reducing issuers’ overall funding costs, while investment grade bond spreads in Asia remain tight.
“With Treasuries having rallied and credit spreads still near all-time tights, the Asian dollar primary market has sprung to life, with multiple issuers keen to lock in funding ahead of ‘Liberation Day’,” said Mark Reade, head of credit strategy at Mizuho Securities Asia.
Issuers in Asia-Pacific have already sold almost US$92 billion of US dollar bonds so far this quarter, the highest quarterly volume since the first three months of 2022, according to data compiled by Bloomberg.
Trump is planning a series of so-called reciprocal tariffs, hitting countries that impose their own levies on US goods. There are signs the tariffs will be less sprawling than previously feared, but the uncertainty over Trump’s moves has left investors across markets on edge. BLOOMBERG
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