Korea, China, Japan and the 10 members of ASEAN have agreed to create a US$700 million facility in 2011 to back up bonds issued by Asian businesses, the Nihon Keizai Shimbun reported Wednesday. A formal agreement on the facility will be made at the ASEAN + 3 finance ministers' meeting in Uzbekistan on May 2. The Asia Development Bank will contribute $130 million to the facility and Japan $200 million.

The facility will guarantee local currency bonds issued by Asian companies and receive premiums, with the main focus on debt to finance infrastructure projects. "The aim is to create an environment that supports corporate debt issuance in Asia, because profits made by exporters in the region end up being invested in the U.S. and Europe," the paper said. The launch of the facility would enable lesser known Asian companies to raise long-term capital in emerging Asian markets.