It may only be April, but the global hunt for income has led to so much demand for high-yielding Asian debt that 2013 is already a record year for issuance.

Junk-rated borrowers have so far raised $18.1bn in the market this year, bettering the previous full-year high of $16.2bn set in 2010, according to data from Dealogic.

“We have had a very strong run so far this year. The market seems to be holding up pretty well,” said Wallace Lam, head of Asian high-yield capital markets at HSBC. “I’ve never been so busy.”

On a year-to-date basis, the volume of cash raised has more than tripled. High yield has grown to account for more than a third of the total Asia ex-Japan credit market this year, up from just 12 per cent at the same point in 2012.

The market has been dominated over the past year by Chinese property developers, who have looked to the offshore bond market to raise capital amid a slowdown in transactions at home.

While that pattern has continued this year – more than half the money raised in high-yield has come from Chinese real estate – bankers have detected a shift.

“Now we’re starting to see more non-China supply, while out of China we’re starting to see a number of non-property deals come to the market. Things are definitely rebalancing a bit,” said Paul Au, head of Asian debt syndicate at UBS.

Issuers in Indonesia, India and the Philippines have recently tapped the market, while Bank of Ceylon, a Sri Lankan state-run lender, raised $500m last week.

“When we look at the market right now, issuers are probably more confident in investing in their businesses than they were a year ago. And the investor base on the buy side is also more willing to put money to work,” said Mr Lam.

The wave of cash into high yield has driven borrowing costs down dramatically. Kaisa, a Chinese developer, paid 13.5 per cent to issue in the dollar bond market in 2010. Last month it was able to borrow again, but at just 8.875 per cent in a $550m deal that attracted more than $10bn in orders.

Much of the record run has been fuelled by increased fund allocations into Asia by global investors, who view the region’s strong economic fundamentals as a better bet when compared to sluggish growth in the west.

“If you look globally, Asia is the brighter spot. We have seen money being redeployed into Asia. As a result things should look decent provided we don’t get extreme scenarios on the economic front,” added Mr Au.

However, some investors have sounded a note of caution over the rapid growth in the market. Coutts, the private bank, recently said that some parts of the Asian junk bond market were looking “overheated”.

The same drive for yield that has fuelled the run in Asian credit has also more recently been a boon for equity bankers. Income-linked equities, such as commercial, business, and real estate investment trusts have rallied strongly this year, and dominated new deal flow. Earlier this month BTS Group raised $2.1bn by listing an infrastructure fund backed by future rail fares on the Bangkok SkyTrain, in what was Thailand’s largest initial public offering to date.

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