The government of Guangdong province and rail operator MTR Corp have completed yuan-denominated bond offerings in Hong Kong, adding to a record wave of such issuances in the city this year.
The 5 billion yuan (US$703 million) offering by the southern Chinese province, comprising 2 billion yuan in two-year bonds, 1.5 billion yuan in three-year bonds and 1.5 billion yuan in five-year bonds, attracted 57.18 billion yuan in bids from investors, making it 11.4 times oversubscribed, Bank of China (Hong Kong) said in a press release on Wednesday. BOCHK is a joint lead-manager and bookrunner, the clearing bank and the green structure consultant for the sale.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
The dim sum bond market has been booming this year. Issuance exceeded 465 billion yuan in the first half, a jump of 28 per cent despite a higher base of comparison in the year-earlier period, according to the Hong Kong Monetary Authority.
The latest offering follows two other issuances by Chinese authorities last month. The Shenzhen municipal government’s fourth and largest dim sum bond offering raised 7 billion yuan with an oversubscription rate of 6.9 times, while the Ministry of Finance’s 9 billion yuan offering was overbought by 2.4 times.
More issuances would expand dim sum bond varieties and improve the yield curve with a more comprehensive pricing reference, regulators and market participants said.
“We welcome the issuance of RMB [renminbi] bonds by the People’s Government of Guangdong Province in Hong Kong for the first time,” Hong Kong’s Financial Secretary Paul Chan Mo-po said last week. “This further enriches the RMB financial products suite in the Hong Kong market and fully leverages Hong Kong’s advantage as a bridge connecting international capital to the financial needs of high-quality projects on the mainland.”
The proceeds from Guangdong’s two-year bonds will be used for projects in Nansha, Guangzhou, while those from the three-year bonds will be used for major infrastructure projects in the Pearl River Delta region, which covers nine prefectures of the province of Guangdong, as well as Hong Kong and Macau. The five-year bonds are for green projects.
“As a major economic province in China, Guangdong province has a strong economic foundation and active market atmosphere,” said Wang Hua-bin, a deputy chief executive at BOCHK.
Story continues
The latest issuance shows the province’s “deep participation in the international financial market and its firm determination to support Hong Kong in solidifying its global offshore yuan business hub”, Wang added.
Guangdong province has also issued four offerings of offshore yuan-denominated bonds in Macau, with the most recent completed last month, worth 2.5 billion yuan.
A man walks past an MTR logo outside IFC in Central on May 22, 2024. Photo: Edmond So alt=A man walks past an MTR logo outside IFC in Central on May 22, 2024. Photo: Edmond So>
Separately, Hong Kong’s rail operator MTR Corp (MTRC) issued its inaugural public offshore yuan-denominated green bonds on Tuesday.
The 4.5 billion yuan offering comprises 3 billion 10-year and 1.5 billion 30-year green bonds, which were oversubscribed by 4.4 times from “high-quality and diverse investors from Asia and beyond”, according to MTRC in an announcement on Wednesday.
These investors include sovereign wealth funds, asset managers, banks, insurance companies and private banks, it said.
The 10-year tranche carries a coupon rate of 2.75 per cent and the 30-year tranche has a rate of 3.05 per cent. The final issue price was tightened by 35 basis points from initial price guidance for both tranches.
“By getting such a strong reception in one of the busiest weeks of the year in the capital markets, MTRC has proved its strong capability in tapping different funding channels at very attractive costs while expanding its investor base,” said David Yim, head of capital markets for Greater China and North Asia at Standard Chartered.
The 30-year tranche marks the longest tenor ever offered by a corporate issuer in the public dim-sum bond market.
“This issuance facilitates international investors to diversify their [RMB] exposure, and the positive market response will enhance liquidity in the longer segment of the [offshore yuan] curve,” said Eugene Ng, managing director of debt capital markets and investment banking at HSBC Asia Pacific.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=66e1a63cfbef4dc4b8c2b377016ccb77&url=https%3A%2F%2Fuk.finance.yahoo.com%2Fnews%2Finvestors-eat-dim-sum-bonds-093000337.html&c=9375883806380943689&mkt=en-us
Author :
Publish date : 2024-09-10 18:30:00
Copyright for syndicated content belongs to the linked Source.