Asia-Pacific loan market poised for strong rebound in 2025 with M&A surge

Asia-Pacific loan volume outside Japan is gearing up for a rebound this year driven by merger and acquisition activity and favourable rates environment, after falling for three years straight.

The region’s loan volumes reached US$164 billion in the final three months of 2024 – the strongest fourth-quarter performance in three years, according to Bloomberg-compiled data. The momentum suggests a robust start for 2025, potentially reversing a three-year decline from a total annual peak of US$672.5 billion in 2021.

“The stabilising rate outlook and the concluding election cycle in several major economies will spur corporate confidence,” said Andrew Ashman, Asia-Pacific head of loan syndicate at Barclays Bank. “This will drive M&A [mergers and acquisitions] and capital expenditure activity. We are expecting a strong pickup in financing volumes.”

The asset class’ 2024 loan volumes fell 4.6 per cent to US$590 billion in Asia-Pacific outside Japan, the lowest yearly tally since 2020, the data shows.

The 2025 deal pipeline is already building. In Australia, an A$800 million (US$497 million) buyout loan backing Pacific Equity Partners’ takeover of car leasing firm SG Fleet Group is set to launch this quarter. US coal company Peabody Energy also intends to refinance a US$2.1 billion bridge facility in the first half for its acquisition of Anglo American’s steelmaking coal mines.

In India, Reliance Industries is seeking to borrow as much as US$3 billion, in what could be the largest loan from the country since 2023, while Shriram Finance is looking to syndicate part of a US$1.28 billion multicurrency social financing, the biggest ever offshore deal from an Indian shadow lender. Elsewhere, Marina Bay Sands is marketing a facility of as much as S$12 billion (US$8.8 billion), setting a potential record for Singapore.