China

Despite a growing pipeline, Panda bond issuance has been stymied by foreign exchange volatility and regulatory issues around auditing and remittance of proceeds. Market participants are working closely with China on the problems and expect regulators to address the accounting requirements in the coming months.

Hungary landed a double milestone on Thursday as its first international bond in four years became the first dim sum bond since November 2015. And while the pricing of the deal has drawn criticism, it proved that RMB is a viable option for CEE sovereigns looking to diversify into Asian currencies.

Foreign central banks will be allowed to repatriate their RMB holdings without restrictions if they have invested in China’s interbank bond market (CIBM) or traded in the onshore foreign exchange market, said the People’s Bank of China (PBoC) in two announcements released on April 14.

Chinese search engine company Baidu is tapping the Asian syndicated loan market for the first time, opening a $1bn dual-trancher to lenders. It is offering close to what peers paid on recent loans, despite its more concentrated business model, but there is speculation it could be lining up an acquisition, writes Shruti Chaturvedi.

The securitization of non-performing loans was the main topic of discussion at the China Securitization Forum 2016 in Beijing as the market gets to grips with the new product.

Green financing in China is blossoming after the inaugural offering from a non-financial firm last week and with the Brics bank also mulling a green bond. With the market taking off, participants want regulators to strengthen the supervision of proceeds to ensure the asset class also grows in quality. Narae Kim reports.

Ford Auto Finance (China) is poised to launch its first auto ABS transaction of the year with a Rmb2.98bn ($464m) deal scheduled to open books next week.

A spate of dim sum MTN issuance that began with Australian banks has spread to include Canadian, Middle Eastern and European institutions.

Chinese bank participation as originators of securitized deals is likely to remain limited as there is little incentive for banks to offload assets from their balance sheets, structured finance specialists have said.

China’s plans to reduce the pressure on its financial sector by pushing banks to securitize non-performing loans (NPLs) is plausible. But several conditions will first have to be met for the product to take off, according to Bank of America Merrill Lynch’s head of international structured finance research Alexander Batchvarov.

Beijing-based Sunshine Life Insurance Corp found a strong following for its $1.5bn triple-tranche bond on Wednesday, despite its debutant status in the international debt market.

The securitization of non-performing loans by Chinese banks is gaining plenty of traction as they are set to achieve off-balance sheet accounting treatment — one of the major hurdles for the development of the asset class.