Syndicated lending in the Asia Pacific region, excluding Japan, has plummeted to a 13-year low, according to the London Stock Exchange Group’s latest report. The first half of 2026 saw loans totalling US$217.6b, marking a 20.2% decrease from the US$272.5b recorded in the same period last year. This decline reflects ongoing political and geopolitical challenges, including trade tensions and policy uncertainties, which have dampened borrowing activities.
The report highlights a significant shift in lending patterns, with a focus on refinancing and alternative funding due to tighter credit conditions. The number of loans also decreased, with 501 deals in the first half of 2026, down 29% from 706 in the previous year. Despite the overall downturn, mergers and acquisitions (M&A) loan volume rose by 22.8% to US$23.9b, driven by event-driven financings in the second quarter.
Australia emerged as the largest loan market in the region, contributing 26.1% of the total volume, despite a 4.6% year-on-year decline. Meanwhile, China and Hong Kong experienced significant drops in loan volumes, with China falling 61.8% and Hong Kong 22%, due to weak global demand and geopolitical uncertainties.
Looking ahead, the second half of the year may see a boost in activity, with ByteDance seeking a US$20b financing, potentially becoming one of the largest offshore loans from China’s technology sector. Additionally, Middle Eastern borrowers are returning to tap into Asian liquidity, despite ongoing tensions between Iran and the United States.
