The current volatility in global markets will continue to hit Asia-Pacific loan markets as investors grapple with divergent monetary policies in Europe and the US, according to participants at the annual global loan summit organised by the Asia Pacific Loan Market Association in Hong Kong last week. "On a relative basis, we will probably see less G3 and more local currency-denominated loans," said Phil Lipton, head of loan syndications for Asia-Pacific at HSBC. The combination of financial market volatility arising from the renminbi's depreciation and a series of interest-rate cuts by the nation's central bank last year has forced Chinese borrowers to cut back on foreign currency loans. This trend was prevalent towards the end of 2015 and will continue to affect deal flow this year, panellists said. "We are seeing more onshore issuance by corporates as they look to take advantage of cheaper costs and lower currency risks," said Lipton. Hong Kong's syndicated loan volumes slid 5% to U5$87bn from 197 deals in 2015 from the previous year's record of US$92bn, according to Thomson Reuters LPC data.
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