States issuing fewer US dollar bonds

Governments in Asia and Europe are raising far less debt in US dollars than usual, preferring to issue bonds at home as they avoid exposure to rising US yields, currency volatility and broader concerns about US government finances.

- PATTURAJA MURUGABOOPATHY AND JIAXING LI

According to data compiled by Dealogic, issuance of dollar bonds by non-US sovereigns dropped 19% to $86.2 billion in the first five months of this year compared with the same period last year, marking the first decline in three years.

Dollar bond issuance by the governments of Canada and Saudi Arabia from January to May fell 31% and 29% to $10.9 billion and $11.9 billion, respectively, while issuance by Israel and Poland declined 37% and 31% to $4.9 billion and $5.4 billion.

At the same time, Dealogic data showed global sovereigns’ local currency bond issuance had climbed to a five-year high of $326 billion so far this year.