Opinion: Dim sum covenants will get tighter, but not that tight

10 Nov 2011

Dim sum bond investors may be asking for stricter covenants in offshore renminbi deals, but they are unlikely to get the strong pledges they are used to in international bonds from Asian issuers. That should not cause too much worry: Asian covenants are already among the strongest in the world — and any Chinese issuer will be very wary about damaging sentiment in a market that the mainland government has invested a lot of energy into.

Investors have been pushing for stronger covenants for the last six months of so, but this is now starting to be reflected in a number of deals, said analysts at Moody’s at the end of last week. The ratings agency published a report on “demanding” investors asking for ...

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