BEIJING • China's brokerages are out-muscling global investment banks to win more underwriting business in Asia's junk bond market amid record offerings, as they increasingly help borrowers from the nation raise foreign currency debt.
Haitong Securities topped the league table for high-yield notes denominated in dollars, euro and yen from companies in Asia excluding Japan in the first quarter, according to data from Bloomberg.
China Merchants Securities moved up four places to fifth. While HSBC Holdings rose three places to second, Standard Chartered and UBS Group slid to eighth and 11th from first and second in the first quarter of the year.
Junk bonds offer more lucrative fees than high-grade bonds, giving an extra boost to financial institutions that can expand in the business. As Chinese firms have flocked to the offshore high-yield market, mainland banks and brokerage firms have grabbed market share away from international peers.
Issuance of junk notes in US dollars, euro and yen from Asia excluding Japan swelled to a record US$14.6 billion (S$20.4 billion) in the first quarter, with nearly 70 per cent from Chinese companies.
Chen Yi, head of debt capital markets at Haitong International Securities Group, said the firm has a "full-scale sales team covering institutional investors and private banking clients based in Hong Kong, Singapore and London" and that its distribution is as good as its international peers.
Junk bonds from Asia are predominantly placed within the region now, with a large chunk going to Chinese asset managers, according to Frank Kwong, head of primary markets for Asia-Pacific at BNP Paribas.