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News August 19, 2026

Why are Asia-Pacific issuers increasing Euro bond issuance?

Asia-Pacific Euro bond issuance surges 20 percent as issuers diversify funding sources

Key takeaways:
• Euro bond issuance by Asia-Pacific issuers rose 82% year-on-year in 2025, reaching €84.7 billion.
• Currency diversification is the primary driver behind the shift.
• Lower euro yields and greater tenor flexibility are attracting sovereign and corporate issuers.
• Strong demand from European, Asian and mainland Chinese investors is supporting liquidity in both primary and secondary markets.

While US dollar-denominated debt remains the primary financing route for Asia-Pacific (APAC) issuers, the past 18 months have seen a notable shift. Driven by changing market conditions, more APAC borrowers are turning to the Euro bond market to diversify their international portfolios.

According to Bloomberg data, Euro bond issuance by APAC borrowers surged from 46.4 billion euros to 84.7 billion euros in 2025, marking a sharp 82% year-on-year (YoY) increase - an upward trajectory that has further accelerated this year. As of 12 Aug 2026, year-to-date Euro bond issuance from the region has jumped more than 25% YoY to 63.5 billion euros from 50.7 billion euros over the same period last year.

Why are Asia-Pacific issuers issuing more Euro bonds?

Deutsche Bank experts attribute this growth to a dual-driven shift across both supply and demand sides of the market:

  • a pressing need for currency diversification from both sides and
  • deepening liquidity in the secondary market.

"Last year’s market volatility prompted sovereign and corporate issuers to diversify funding currencies and mitigate single-currency concentration risk," said Ed Tsui, Head of DCM and Syndicate for Asia Pacific at Deutsche Bank.

As the world's second-largest debt financing currency, the euro has been the primary beneficiary, alongside the Australian Dollar and Offshore Renminbi. Ed Tsui

 “This year, more mature and frequent APAC issuers, particularly across financial institutions and Sovereigns, Supranationals and Agencies (SSAs), are actively considering Euro financing,” added Tsui.

The operational edge: Lower yields and flexible tenors

Beyond macro strategic factors, distinct operational advantages of the euro are also fueling the sovereign and corporate pivot:

  • Lower absolute coupons: Lower euro all-in yields provide an immediate pricing advantage for sovereign issuers retaining proceeds in reserves without swapping for another currency. For companies using cross-currency swaps, the diversification benefits effectively offset any marginal differences in cost after the swap.
  • Tenor flexibility: Unlike the 3, 5, 7, and 10-year benchmarks standard in the US dollar market, the Euro market readily accommodates off-benchmark tenors such as 4, 6, 8, or 12 years. This flexibility allows issuers to smooth out their debt timelines and better manage large chunks of upcoming refinancing.

Secondary market boom supports issuers in developed Asian markets

On the buy-side, diversification strategies are funneling substantial institutional capital into Euro assets. This primary market boom is heavily reinforced by a surge in secondary market activity.

Owen Gallimore, Deutsche Bank’s APAC Head of Credit Analysis, notes that deeper secondary market liquidity has enhanced the pricing efficiency of APAC Euro bonds, bolstering confidence for both issuers and investors.

"In addition to the overwhelming primary market reception, we have observed robust demand for Euro-denominated paper in the secondary market," Gallimore added. "While European onshore investors bring incremental demand, traditional Asian US dollar bond investors seeking portfolio diversification serve as the anchor for these order books. Notably, mainland China’s capital pool has provided significant incremental liquidity, with a strong appetite for North Asian credits."

What is a Euro bond

A Euro bond is a bond denominated in euros and issued by a borrower seeking funding from international investors. Euro bonds are used by sovereign governments, financial institutions and corporations to raise capital and access a broad investor base across global debt markets.

Why do companies and governments issue bonds in multiple currencies?

Issuing bonds in multiple currencies helps borrowers diversify their funding sources, broaden investor access and reduce concentration risk. A multi-currency funding strategy can also provide flexibility when market conditions, investor demand or borrowing costs vary across different regions and currencies.

What advantages do Euro bonds offer Asia-Pacific issuers?

Euro bonds can provide lower borrowing costs and greater flexibility in debt management. Deutsche Bank notes that lower Euro yields can offer an immediate pricing advantage, while the Euro market supports a wider range of maturities, including off-benchmark tenors such as four, six, eight and twelve years. This allows issuers to better manage maturity profiles and refinancing needs.

Who is buying Asia-Pacific Euro-denominated bonds?

Demand for Asia-Pacific Euro-denominated bonds comes from a diverse investor base, including European institutional investors, traditional Asian US dollar bond investors seeking diversification, and investors from mainland China. Deutsche Bank experts note that growing secondary market liquidity and strong demand for North Asian credits have helped support investor participation.

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