Asia Pacific

The offshore renminbi (CNH) bond market this week welcomed its first deals in almost a month, including a mammoth sale by the Chinese government. Bankers are now expecting momentum in the sector to finally pick up as conditions become more favourable for issuers, writes Narae Kim.

Chinese broker Southwest Securities started receiving bids for a three year dim sum bond on May 21 as it tries to tap the international market for the first time.

The opposite extremes of the yield curve saw the keenest pricing in this week's Rmb14bn ($2.3bn) dim sum auction from China's ministry of finance (MoF) on Wednesday morning. But the seven and 10 year tranches were seen at or wider than secondary, reflecting an ultra-flat part of the curve that offered less interest than longer dated paper.

China is set to welcome its first green bond, picking a bank to sell the offshore issue, according to a panellist at the Euromoney Conferences China Debt Capital Markets Summit.

China's Ministry of Finance (MoF) has wrapped up its Rmb14bn ($2.3bn) auction of offshore renminbi government bonds in Hong Kong, with the deal about three times covered.

Zhengzhou Yutong Group has opened books for a three year dim sum bond, having opted to add the credit enhancement of a standby letter of credit for its first transaction in the offshore renminbi (CNH) debt market.

Analysts are expecting a very strong reception to today's auction of offshore renminbi China government bonds (CGBs) by the Chinese Ministry of Finance. The result of the auction, which sees some Rmb14bn ($2.3bn) of bonds offered across six tenors, will be announced by 5pm Hong Kong time.

The dollar market continued to sustain covered bonds on Wednesday as DNB mandated leads for a five year, a day after ANZ issued $1.25bn in the same tenor. The Australian bank got better execution than would have been achieved in euros and could have priced even tighter. The excellent result is testimony to the issuer’s long absence and to the depth of demand evident across the dollar fixed income market.

Chinese corporates will be allowed to issue Formosa bonds in Taiwan in the future, said Huang Bing Jing, deputy chief executive officer of Taipei Exchange, speaking at Euromoney's China Debt Capital Markets Summit 2015 in Beijing on Tuesday.

Development of China's domestic bond market is a key step for the internationalisation of the renminbi, according to Gao Jian, former vice governor of China Development Bank, speaking at Euromoney's China Debt Capital Markets Summit 2015 in Beijing on Tuesday.

Torrid market conditions have kept issuers away from the euro benchmark market since April 29, forcing borrows to consider alternative currencies. On Tuesday, Abbey printed a £500m three year sterling deal, and even though the deal was not subscribed, bankers felt the sterling market was still open. Separately, ANZ has mandated leads for the second dollar benchmark from Australia this year.

Regulators have moved to assuage concerns around issues of beneficial ownership under the Shanghai-Hong Kong Stock Connect, with international investors holding A-shares now guaranteed the same rights as any other A-share investor.