The G3 bond issuances in Asia, ex-Japan and Australia, and loan syndication market in Asia-Pacific, ex-Japan, both got off to slower start in the first quarter of 2018 compared a year ago due to volatility across the global capital markets and the slowing economy in China.

Figures supplied by Thomson Reuters on April 2 showed the volume of G3 bond issuances in Asia remained robust at US$81.50 billion from 136 deals in the first three months of 2018, but this was down from over US$90.34 billion with a similar number of transactions of 136 in comparable period of 2017.

The smaller volume followed another record year for G3 bond issuances in Asia in 2017 when the amount totaled US$334.41 billion, up from over US$218.84 billion in 2016.

China remained the biggest G3 bond issuer in the first quarter of 2018 with US$39.98 billion, a slight increase from US$39.08 billion in the same 2017 period. Hong Kong was the next biggest issuer with a volume of almost US$13 billion, down from over US$16.64 billion.

Also posting declines in terms of issuances were South Korea with US$4.52 billion from US$8.02 billion, Indonesia US$4.19 billion (US$4.74 billion), Singapore US$2.90 billion (US$4.04 billion) and Malaysia US$150 million (US$2.20 billion).

India, meanwhile, bucked the downtrend as issuances rose from US$2.99 billion to US$3.59 billion during the same period.

Of the total volume in the first quarter of 2018, high yield issuances also declined to US$10.77 billion from 30 deals, compared with US$11.84 billion from 27 deals in the corresponding period of 2017. China was likewise the biggest issuer of high yield bonds with US$5.98 billion, but the amount also represented a drop from US$7.94 billion over the similar period.

One of the biggest transactions during the period was for Chinese Internet giant Tencent Holdings, which priced in January a US$5 billion offering in four tranches.

HSBC topped the league table for bookrunners in the first quarter of 2018, according to Thomson Reuters, with a total volume of over US$6.33 billion from 52 deals, followed by Bank of China with US$4.32 billion (42 deals), Citi US$3.71 billion (30 deals), Standard Chartered US$3.52 billion (35 deals) and Bank of America Merrill Lynch US$3.49 billion (20 deals).

Meanwhile, the syndicated loan volume in Asia-Pacific, outside of Japan, fell 17% to US$80.5 billion during January-March 2018 from US$96.9 billion in comparable period of 2017. Event-driven financing was adversely impacted by measures adopted by the Chinese regulators to control capital outflows.

Loans related to mergers and acquisitions plummeted to just US$4.4 billion from US$9.79 billion a year earlier. The largest event-driven financing was the HK$13.8 billion (US$1.8 billion) leveraged buyout loan backing a consortium’s winning bid for commercial properties of Link Real Estate Investment Trust in Hong Kong.

On the other hand, refinancing activity was a main driver in the loan volume as it surged 23.5% to US$32.6 billion in the first three months of 2018, against US$26.4 billion in the corresponding period a year ago.

Malaysia manifested a significant jump in market share with a loan volume of US$8.7 billion, a five-fold increase over the US$1.74 billion raised in the first quarter of 2017. This was on the back of the US$8 billion jumbo loan for Petronas’ refinery and petrochemical integrated development project.

Singapore’s loan volume also jumped 94% to US$10.14 billion mainly due to a tenor extension on a S$5.1 billion loan (US$3.89 billion) for Marina Bay Sands, which was originally signed in 2012.

These increases were in contrast to the 48.5% plunge in China borrowings to US$17 billion from around US$33 billion due to continuing slowdown in domestic economy.