Governments, banks and corporates are issuing more longer-dated bonds, in a sign of increased confidence among investors on the prospects for the global economy.
The shift towards longer-term bonds is expected to reduce refinancing risks in 2011 and 2012, easing worries that a build-up of debt maturing might make it more difficult for governments and companies to renew loans.
Issuance of longer-dated bonds maturing over 15 years or more has risen to 20 per cent over the past three months compared with 10 per cent in December last year, according to Dealogic.
By contrast, issuance of shorter-dated bonds maturing under five years has fallen to 30 per cent since September 1 compared with 58 per cent at its peak in December 2008.
As longer-dated securities are considered more risky than shorter-dated bonds, the shift signals improved investor sentiment.
In turn, governments, banks and corporates are keen to lock in longer-term debt for stability to reduce the risk of refinancing in the shorter term, should the economic outlook deteriorate.
There is record high of $3,240bn of debt maturing in 2011, according to Dealogic, as banks in particular have issued a lot of short-term bonds, which have been guaranteed by governments. This compares with $2,905bn maturing this year.
In the aftermath of the collapse of Lehman Brothers in September last year, investors were only willing to buy short-dated debt, which is more liquid. At one point, the only debt many were willing to buy was short-dated US Treasuries.
Even the Dubai debt scare has failed to put off investors from buying longer-dated bonds, with BAA, the UK airports operator, yesterday issuing the largest sterling inflation-linked bond this year with a maturity of 30 years.
In the past month, China, Qatar and Brazilian groups Petrobras and Vale have also launched long-dated bonds as emerging market issuers have been some of the main beneficiaries of the growing appetite for longer-dated debt.
Last month, China launched its first 50-year bond and Qatar priced 30-year bonds.
Nigel Rendell, senior emerging market strategist at RBC Capital Markets, said: “It is very sensible to lock in longer-term debt now. Companies get stability and investors get higher yields than they would for shorter-duration debt.”
加拿大皇家银行资本市场(RBC Capital Markets)新兴市场高级策略师奈杰尔•兰德尔(Nigel Rendell)表示：“现在锁定较长期债券非常明智。企业会得到稳定性，而投资者会得到高于较短期债券的收益。”
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