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APAC Chart of the Week: APAC (ex-Japan) loan tenors shorten in 2020 YTD amid COVID-19 disruption

APAC Chart of the Week: 25th November 2020

The average tenor of syndicated and club loans in the Asia Pacific (ex-Japan) has shortened to 3.71 years so far this year from 4.06 years in all of 2019, underpinning lenders’ reduced risk appetite amid COVID-19.

The volume of loans closed in 2020 YTD with maturities of one to three years totaled USD 128.5bn, which is 34% more than the USD 95.86bn closed with tenors of more than three years and up to five years. That is a reversal of the trend from the same period last year, when USD 131.08bn of the loans closed were due in one to three years, 17.1% less than USD 158.05bn with maturities of more than three years and up to five years.

By region, borrowings by South and Southeast Asian companies recorded the biggest decline in average tenor -- by around 4.8 months, to 4.16 years -- in 2020 YTD, from 4.56 years in entire 2019. The average tenor for deals in Australasia also fell by 4.5 months, while that for Greater China’s loans only dropped marginally by 1.7 months during the same period.

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