Asia Shifts to Euro Borrowing as US Financing Dominance Wanes
(Bloomberg) — Asian economies aren’t just shifting their trading ties to fight against US tariffs, they’re also increasingly moving their financing to other markets, underscoring how President Donald Trump’s policies risk eroding American dominance of capital raising.
Asia Pacific borrowers increased euro‑denominated issuance to a record 23% of the total across both currencies this year, up six percentage points from 2024, according to Bloomberg-compiled data. Euro note sales by companies and governments rose 75% in 2025 to €86.4 billion ($100.7 billion).
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Multiple Asian deals ranked as the most oversubscribed in Europe’s publicly syndicated debt market during their launch week, the data showed. US dollar deals still make up the majority of financing deals, and borrowing in the greenback is up 29% by Asian issuers this year. But the market share declined, and the American edge for funding may be slowly eroding.
“A key driver is the need to diversify away from US dollar concentration,” said Daniel Kim, co-head of debt capital markets for Asia Pacific at HSBC. “This year’s surge in euro-denominated bond issuance stems from a confluence of strategic motives that go beyond the routine refinancing.”
US President Trump’s trade moves this year, and his pressure on the Federal Reserve to cut interest rates despite inflation concerns, has shaken investors’ confidence in the dollar’s pre-eminence, prompting investors to lean into euro assets. Asian borrowers have followed suit, with euro bond issuance surging to meet demand for diversification, while the greenback slid 11% against the euro.
“De-dollarization or diversification of investment portfolios to have more deployment in non-dollar currencies is a theme we have witnessed this year,” said Ben Wang, head of offshore China debt capital markets at Deutsche Bank AG.
The euro accounted for a smaller portion of Deutsche Bank’s APAC bond trading volume at the beginning of the year, but accounted for “more than 10%, even 20%” after entering the second half, he said.
The boom is also being driven by lower funding costs, with some Asian borrowers able to raise money more cheaply in euros than in dollars or their home currencies. The premium that investors pay to swap euros into dollars is at a near five-year low of 3.1 basis points, data compiled by Bloomberg showed.
Naysayers have been forecasting the end of the US dollar as the reserve currency for years, and have been terribly wrong. For years, greenback issuance has been surging, and it’s unclear whether the latest reversal is a blip or a long-term trend.
As of June, the greenback had accounted for 63% of bonds issued by borrowers outside their home currency, a 20 percentage-point increase since the end of 2007, according to data from Bank for International Settlements. The euro’s share had dropped to 25% from 32% during the period.
But the increasing attractiveness of the euro to Asian market participants for funding and debt investment reflects a “normalization” following that boom in dollar sales, said Martin Schulz, chief economist at Fujitsu Ltd. in Japan. “We have a more multipolar world,” he said.
Standout deals in Europe this year include China’s €4 billion bond sale that attracted bids topping €100 billion, and Japanese telecom giant NTT Inc.’s €5.5 billion offering, the largest corporate euro issuance from Asia in 2025.
“It gives you a broader market to invest in, with cash flows from different regions and different types of companies,” said Chris Iggo, London-based chief investment officer for core investments at Axa Investment Managers. “It is a fairly healthy development.”
The continent’s appeal as a funding destination is expected to persist into next year. Owen Gallimore, APAC head of credit analysis at Deutsche Bank, forecasts Asian borrowers’ euro issuance will climb to $125 billion in 2026, a more than 20% gain.
“We see issuers on the whole looking to expand their footprint, not just within Asia but also outside, with Europe continuing to be a key marketplace,” said Henry Loh, head of Asia credit at Aberdeen Investments. “We expect to see growing interest in euro issuance to finance this growth.”
Week In Review
Netflix Inc. has lined up $59 billion of financing from Wall Street banks to help support its planned acquisition of Warner Bros. Discovery Inc., which would make it one of the largest ever loans of its kind.
Wells Fargo & Co., BNP Paribas SA and HSBC Plc are providing the unsecured bridge loan.
The bridge is expected to be refinanced with up to $25 billion of bonds, which are sold to institutional investors, plus $20 billion of delayed-draw term loans and a $5 billion revolving credit facility, both of which are typically held by banks.
Wall Street is gearing up to lend massive amounts of money to the biggest players in artificial intelligence — and simultaneously trying to figure out how to protect itself from any bubble that its financing may be helping to inflate, through moves like buying credit derivatives and using significant risk transfers.
Oracle’s credit-default swaps hit the highest level since 2009. The rising cost of default protection reflects investor angst over the gap between the massive investments already made in AI and when investors can expect to see productivity gains and an increase in corporate profits.
Morgan Stanley, a key players in financing the artificial-intelligence race, is considering offloading some of its data-center exposure via a so-called significant risk transfer.
A shortage of new Additional Tier 1 bonds is expected to keep a record-breaking rally for the riskiest type of bank debt going next year, potentially pushing spreads to ever-tighter levels.
Fixed maturity funds are changing the face of the corporate-bond market and have left unwitting “mom and pop” investors among the main drivers of the cost of capital for the world’s largest companies. Because the funds often just snap up large amounts of debt without paying much attention to pricing, they may be distorting prices in credit markets.
Merck & Co Inc. raised $8 billion through a US investment-grade dollar bond offering, with part of the proceeds expected to help fund its proposed acquisition of Cidara Therapeutics Inc. Overall, 24 borrowers raised capital this week in the US high-grade market this week.
Canada’s PSP Investments, Oaktree Capital Management, Franklin Templeton and other private lenders snapped up about $2 billion of subordinated debt that banks had committed to after financing Blackstone Inc. and TPG Inc.’s buyout of Hologic Inc.
A group of banks led by Goldman Sachs Group Inc. has resumed efforts to sell debt for healthcare services firm Sevita after scrapping an offering in October — one of several leveraged loan sales that have struggled to attract demand in recent weeks.
Goldman Sachs has paused a planned $1.3 billion mortgage-bond sale for CyrusOne, the data-center operator that supports CME Group Inc., after a major outage that hit one of the world’s largest derivatives exchanges.
Carlyle Group Inc. sold a troubled loan it provided to iRobot Corp. less than three years ago as the maker of Roomba vacuum cleaners is trying to stave off a potential bankruptcy filing.
Blue Owl Capital Inc. raised $1.7 billion for its latest digital infrastructure fund, about a year after the firm acquired data center specialist IPI Partners.
The latest fight between billionaire Patrick Drahi and his companies’ creditors is shaping up to be the most contentious yet, with Altice International announcing it was doing a so-called drop-down, where it transfers assets to units that can then borrow more money.
On the Move
Citigroup Inc. hired Chris Schuville, formerly at HSBC Holdings, and Larry Liou, previously at TD Securities USA, to its high-grade corporate trading team. The bank is adding US investment-grade debt trading staff as readies for a potential record-setting surge of corporate-bond sales next year due to the artificial-intelligence investment boom.
Wells Fargo has hired Jackie Krese, previously at BlackRock, as a managing director and global head of syndications within its fund finance group.
Anuj Jain has joined asset manager T. Rowe Price as a securitized products credit analyst, after 11 years at Barclays where he was most recently head of asset backed securities research.
–With assistance from Masaki Kondo, Helene Durand and Rheaa Rao.
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