Global Central Banks Help Send Asian Bond Costs to Decade Low

by Denise Wee and Lianting Tu

Asian firms are getting a little help from global central banks, as borrowing costs in the region’s bond market slide to the lowest levels since before the global financial crisis.

The extra yield over Treasuries that investors demand to hold U.S. currency notes from the region’s issuers slid 21 basis points in August to 204, the lowest since 2007, according to a Bank of America Merrill Lynch index. Clues to where the financing costs go from here may be found in minutes from the Federal Reserve’s July meeting scheduled for release later Wednesday.

Asia-Pacific borrowers outside Japan boosted dollar bond sales 55 percent this quarter, as investors facing negative rates in Japan and Europe lap up the notes, which had an average 3.77 percent coupon.

Continue Reading at…