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A record $1.8 trillion worth of bonds are set to mature in Asia this year, data shows, leading to a rush to refinance them in the coming months.

Most of the maturing bonds in Asia are from China, South Korea, Australia and India and the region dwarfs Europe and the United States in terms of the total, the data from Refinitiv showed.

The refinancing surge is set to bring a fee bonanza to banks, even though investors are viewing bonds from China with caution after some issuers defaulted, and as risk is growing in markets such as India due to a resurgence of COVID-19 cases.

The $1.8 trillion maturing debt includes dollar bonds of $283.4 billion, also the highest on record, the data showed.

Record low interest rates and easy global liquidity have led to increased activity in Asia’s debt markets this year, but bankers said new issuance for fresh spending may start to taper.

“A lot of the issuers who have come to the market have already done so, hence incremental volume from new issuers and existing borrowers who want to raise money will be more modest over time,” said Ken-wei Wong, head of Asia Pacific fixed income syndicate at Barclays.

In South Korea, $18.8 billion worth of bonds have been issued so far in 2021, nearly double the same period a year ago and triple the level of activity in 2019, Dealogic data showed.

Green and sustainable bonds issued this year in the Asian nation have been worth $6.4 billion, a near five-fold increase over the same period in 2020, the data showed.

South Korea’s government has set the target for the country to be carbon neutral by 2050 which has prompted companies to step up issuing environmental, social and governance (ESG) linked debt.

“ESG is top of the policy agenda in Korea and this market will develop further as more companies embrace the product,” said June Won, Citi’s head of Korea capital markets origination.

But stubbornly high coronavirus cases in some countries, like Indonesia, may temper demand for Asian bonds.

And more Chinese companies could default on their obligations, after prominent names like China Fortune Land (600340.SS) and Tsinghua Unigroup did, lawyers said.

Also, uncertainty over China Huarong Asset Management’s (2799.HK) future is still roiling bond markets.

“Out of the major players in Asia, I am seeing an uptick in distressed situations in Indonesia,” said Sophie Lyall, counsel at law firm Ashurst.

“There have been some pretty hefty PRC offshore bond defaults this year which indicates a level of distress onshore, although the amounts are still small in comparison to the size of the onshore bond market,” Lyall said.

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