The number of bonds issued by Asian market participants could triple within the next five years as borrowers seek less-traditional financing methods amid tighter capital regulations and deleveraging, lending institution Standard Chartered predicted recently.
The report, which was released on November 9, predicted that Basel III and the deleveraging being done by European lending institutions would cause the Asia ex-Japan corporate bond market to triple in size to more than $10 trillion by 2017 from its current value of $3.3 trillion, according to Reuters.
The report predicts that implementing Basel III will cause a lending shortfall of around $340 billion in the next five years, according to the media outlet.
The document also stated that "we assume that this financing shortfall will be covered by increased issuance of corporate bonds. This increased issuance is expected to raise the share of bond markets to circa 40 [percent] of corporates' total funding mix by 2017, from around 25 [percent] currently," the news source reports.
Many lending institutions have predicted that adopting Basel III will curtail their lending, and various representatives of U.S. lending institutions said this in testimony given before a House Committee.
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