This report examines the recent growth and future prospects of the US$ Reg S bond market in the Asia Pacific region. Based on the views of NAB specialists, internal and external data, and independent research, key findings include:

• A shifting landscape: Increased global liquidity, Asia’s growing wealth and the rise of the regional investor base have made the US$ Reg S market an increasingly important source of funding for Asia Pacific issuers
• Why US$ Reg S – and why now? While Chinese issuers and investors still are major players the regional US$ Reg S market, it is becoming more diverse, with Australian, Japanese, Indian and other regional corporates exploring US$ Reg S issuance due to its low costs and lighter documentation requirements versus other formats
• Get to know your investors: Although the growth of the Asia Pacific US$ Reg S market is expected to moderate in the near-term, investor demand is expected to remain robust given the region’s vibrant economic backdrop
• Future prospects: The pressing need to fund regional infrastructure under programmes such as China’s Belt and Road Initiative (BRI) will be a major future driver of Asia Pacific US$ Reg S issuance, which is also likely to include more green and social bonds to meet rising appetite for sustainable assets

The market’s growing depth and relative openness has convinced more Australian issuers, many of which were previously focused on the domestic dollar market, to explore US$ Reg S funding. Recent NAB data confirms the rising interest in US$ Reg S issuance among Australian corporates, with total issuance more than doubling from US$775 million for all of 2016 – the first year Australian firms accessed the market – to US$1.6 billion in the first nine months of 2017 alone. With Australian borrowers accounting for just 1% of the US$ Reg S market, there is ample room for growth, and that proportion is expected to rise to 2-3% by 2018.

To read the full report and the infographic, please download:

Full report: Development and diversity: US$ Reg S comes of age in Asia Pacific  (PDF, 3 MB)
Infographic: The opportunities of US$ Reg S for Australian issuers (PDF, 256 KB)