Asia Pacific

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In this week’s round-up of offshore renminbi news, RMB marks its second consecutive month in the top ten of most-used payment currencies, Daimler is set to tap China’s Panda bond market, and Switzerland is eying renminbi hub status.

DBS Bank in Hong Kong is looking to market equity-linked notes denominated in renminbi that reference an equity underlying in Hong Kong. Issuance is based on the view that there is likely to be a relaxation in RMB convertibility that will spur demand for such structures, writes Daniel O’Leary of Derivatives Intelligence (DI).

New Zealand dairy company Fonterra priced its second ever dim sum bond on Monday, selling one the largest offshore renminbi deals from a corporate borrower in recent years.

Bank of China’s Taipei Branch on Monday began offering renminbi cash deposit and withdrawal services to financial institutions in Taiwan. The move comes at a important time for the offshore renminbi sector in the territory, with two borrowers having tapped the bao dao market last week and renminbi deposits in Taiwan surpassing those in rival hub Singapore for the first time.

New Zealand dairy company Fonterra priced its second ever dim sum bond on Monday, selling one the largest offshore renminbi deals from a corporate borrower in recent years.

Dim sum supply has had an explosive start to the year, with a torrent of deals from on and offshore issuers taking supply to four times what it was in the first two weeks of last year’s record six month run. But even more impressive is the appetite for yield, exemplified by Trade and Development Bank of Mongolia’s debut in the currency, which despite modest size signals the extent to which dim sum boasts a thriving high yield segment absent in any other Asian currency bond market, writes Steve Gilmore.

Export-Import Bank of Korea (Kexim) priced its debut bao dao Formosa bond on Thursday night, selling Rmb500m ($82.6m) of 10 year notes in Taiwan to yield 4.50% — alongside another Singapore listed five year tranche. The deal not only marked the first renminbi-denominated bonds in Taiwan from a Korean issuer, but also attracted attention because of its innovative structure of combining a Formosa transaction with another format of offshore renminbi bond.

DNB Bank priced ¥81.6bn ($780m) of five year Samurai bonds on Friday, its first Samurai deal since January 2012. Not only did the issuer get a bigger deal away this time, it also reached more than three times as many investors as it did with its last transaction.