LISTEN: not going back

The pre-de-dollarisation era in Australian debt and capital markets is unlikely to return.

That’s the view of ANZ’s Gavin Chappell, who told ANZ Institutional that investors that have spent time setting up a framework to manage their Australian-dollar exposure are likely here for the long haul.

“I actually think the Aussie dollar market is going to remain strong on an ongoing basis,” Chappell, ANZ’s Head of Loan Syndications, told an On Air with ANZ Institutional podcast. “Because investors have developed that capability now and they're not going to step back from that.

“I'm actually reasonably positive about long-term liquidity and Aussie dollars.”

The trend toward de-dollarisation — where investors across markets of all types have moved to reduce their exposure to the United States dollar — has continued apace in 2026. This theme has been a major factor, alongside an investor shift out of Asian markets toward Australia, behind record levels of activity in the local syndicated loan and corporate bond markets.

“I don't see that we're likely to see any sort of drop off in the level of proportionate liquidity we see in terms of investors prepared to invest in Aussie dollar,” Chappell said.

Chappell made the comments in conversation with Gwen Greenberg, ANZ’s Head of DCM Australia ahead of the 2026 ANZ Debt Conference in March. You can listen to an edited version of the conversation — part one of a two-part chat — on podcast below.

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Preference towards

Greenberg told the podcast it was hard to tell what would happen in a period of high uncertainty — but the Australian-dollar bond market was continuing to benefit from the de-dollarisation trend.

“While we don't see investors pulling out their US dollar, assets, we do see a preference towards weighting or investing outside of US dollars,” she said.

While the US dollar market has long been a competitive area for Australian issuers to fund, “that pricing really hasn't stacked up against the Aussie for some time now,” Greenberg said.

“Over the last two years, the Aussie has really, outperformed in terms of competitive pricing versus the other areas.”

Greenberg noted the spike in offshore issuance in the Australian market as another interesting factor. In 2025, such issuance grew to a quarter of the total, a record split in what was a record year for total issuance of that type.

Interesting too, she said, was the source of that demand – not one or two locations, but a swathe of markets across Europe and beyond. 

“As we start this year off, we've seen a lot of offshore issuers coming quickly to the Aussie market,” Greenberg said, noting at the time of recording such issuance made up almost two-third of total supply.

“We're expecting to have a very good start to the quarter.”

All of this points to a market that has “firmly established itself in terms of resilience of credit, in terms of keeping spreads at historical lows, being a source of liquidity across tenors, across multiple tranches and price breaks” Greenberg said.

Supply and demand

Much of the same factors were at play in the syndicated loan space, Chappell said, as the global supply-demand imbalance around credit forced businesses, particularly in Asia, into alternative markets like Australia.

Like bonds, the loan market saw record volume in 2025, driven by what Chappell called “a real step-up [in] investor appetite, but also the number of individual investors we've dealt with across the market over the past year”.

“The pool of investors that participated in the loan spike was broadly up about 25 per cent,” he said.

That spike — from both “typical bank investors and also non-bank investors”, according to Chappell — was driven in large part by volumes in the Asian region hitting eight-year lows.

“Part of the reason for that really strong investor appetite in Australia was the fact that activity in Asia was really soft,” he said. “So that softer activity in Asia meant those investors are sitting on cash looking for home. Australia is a great place in the region for those investors to target.”

The experts also touched on how the strength of Australia’s corporate governance has helped it as a destination for foreign investment, how the supply-demand imbalance in putting pressure on investors to diversify their credit sources, and the surprising trends in duration in both the loan and bond markets. Listen to the podcast above — part one in a two-part conversation — for more.

This note reflects the edited version of the conversation as it appears on the podcast