China

Corporate treasurers and financial institutions feel that the Panda bond market has great potential as a funding venue, but regulators and industry bodies will need to push for reforms to make it viable.

China Development Bank jumped on the floating rate note (FRN) bandwagon this week, bagging $3bn equivalent and adding its name to a list of issuers that recently sold bonds in the format. With demand rather than supply driving deals, and with interest rate hikes looming, the stage is nicely set for more FRN trades, writes Addison Gong.

Two firms stole the headlines in the Panda bond market this week, with Shimao Property Holdings filing for a new programme and China Orient Asset Management (International) Holdings’ cancelling its planned outing.

Events, including a rise in the probability of a March interest rate hike and US President Donald Trump’s speech to Congress, did not hold investors back from jumping into deals from Grand China Air, China Aircraft Leasing Group (CALC) and Hong Kong Express Airways (HK Express) on Tuesday.

Borrowers that ventured out to the Asia debt market on Wednesday should consider themselves lucky as the competition turned fierce on Thursday with six live deals. Beijing Properties (Holdings) and China Everbright Bank Hong Kong were among the names that managed to get ahead of the supply deluge.

Onshore RMB bonds are increasingly making their presence felt in the international stage following the launch of a pair of Bloomberg-Barclays China indices on Wednesday.

The strength of the primary debt market in Asia shows no signs of abating, with a number of borrowers heading out on Thursday for fresh dollar fundraisings.

International asset managers are pushing for a more liberal version of the upcoming China-Hong Kong ETF Connect, with the focus on whether ETFs will be considered as stocks or funds by the regulators.

China Orient Asset Management (International) Holdings’ proposed Rmb2.8bn ($407m) Panda bond programme on the Shanghai Stock Exchange has been cancelled.

BlackRock has received the very first RMB qualified foreign institutional investor (RQFII) quota under the US allocation from the State Administration of Foreign Exchange, in yet another sign that global asset managers are ready to boost their China investments.

Maikun Investment Co, an entity under Beijing Automotive Group (BAIC), is borrowing $290m from a five year syndicated loan that opened for retail participation on February 17.

Tuesday turned out to be a big day for aviation related companies with Grand China Air, China Aircraft Leasing Group and Hong Kong Express Airways venturing out with their respective bonds, raising a combined $810m.