Lock in prices before interest rate hikes! With the Federal Reserve's interest rate decision approaching, borrowers in the Asia-Pacific region are rushing to issue US dollar bonds.

On Tuesday, borrowers from across the Asia-Pacific flocked to the dollar bond market, triggering one of the busiest issuance waves in the region this year. With interest rates likely to rise further, global corporations are preparing to fully absorb investor funds. Insiders revealed that over 10 issuers in the region are lined up to prepare transactions, including Japan's largest bank, Mitsubishi UFJ Financial Group, which is seeking to sell $3.5 billion in debt. Japanese peer Mizuho Financial Group, Commonwealth Bank of Australia, and Malayan Banking Berhad are also seeking financing, while medical equipment manufacturer Olympus has engaged banks to prepare for a potential bond issuance. This wave of issuance highlights issuers' eagerness to take advantage of a rare combination of tightening credit spreads, resilient investor demand, and relative market calm as investors assess the possibility of the Federal Reserve raising interest rates later this month. The latest U.S. inflation data will be released this Friday, and Fed officials have indicated that this data will be crucial for deciding whether to raise rates. Zerlina Zeng, head of Asia strategy at CreditSights in Singapore, stated, "With U.S. rates likely remaining elevated for a longer period, issuers may accelerate their financing efforts. Credit spreads are still tightening, and market sentiment remains strong." This wave of financing is expected to accelerate further. Dealers anticipate that, driven by investments in artificial intelligence (AI), bond sales could reach approximately $70 billion this week alone in the high-rated U.S. market. Credit spreads are currently hovering near decades-low levels, but have begun to widen in recent weeks as investors prepare for the issuance peak after summer. For investors, they can still lock in an all-in yield of around 5.5% on higher-rated U.S. corporate bonds, which is sufficient for some to offset the risks posed by sticky inflation and the potential erosion of strong corporate profits due to conflicts in the Middle East. According to industry research data, super cloud providers in the U.S., like Alphabet, are increasingly turning to the global bond market to fund capital expenditures that could reach $6 trillion by 2030. Xixi Sun, head of debt underwriting at Citigroup for Greater China, stated, "Corporations are actively utilizing the bond market to raise funds for data center construction, infrastructure, and computing power. This demand has pushed global corporate bond issuance to record levels. We see this scenario playing out in the U.S., Europe, and across Asia."