China

Bond investors are facing yet another blockbuster bank capital deal just a month after Bank of China’s $6.5bn additional tier one (AT1) with Industrial and Commercial Bank of China (ICBC) set to launch its own trade later this week. While ICBC is likely to lose out in size, it is planning to steal the spotlight by executing a triple-currency transaction including a record beating offshore renminbi offering.

The Export-Import Bank of Korea (Kexim) is set to raise Rmb1bn ($163m) from a dim sum that will be split between a three and a five year, according to bankers working on the trade.

China’s Ministry of Finance’s (MoF) second auction of offshore China government bonds (CGBs) this year priced in line with market predictions on Thursday, with the curve flattening from the previous auction in May on the back of easing expectations, and spreads narrowing versus onshore paper. Particularly notable was the demand for the three and 10 year tranches, resulting in subscription levels of 4.32 times and 3.85 times, respectively.

The newly-minted Shanghai-Hong Kong Stock Connect has made some progress in opening up China’s capital markets, but the next level would be inclusion into the MSCI indexes, said analysts.

The Australian state of New South Wales priced a landmark debut offshore renminbi bond late in the evening Sydney time on November 19, riding the momentum from this week's establishment of an Australian RMB hub to shave 10bp off initial guidance and hit its target size and funding cost.

Chongqing Yufu Assets Management managed to raise Rmb500m ($81m) through its debut bond in offshore renminbi on November 19 but struggled to get investor attention amid a raft of competing supply. As well as being its first outing in the international bond market it is also the first offshore issue from the Chongqing state-owned enterprise.

Dim sum investors are showing plenty of appetite for Chinese brokerages, with Orient Securities this week becoming the fourth issuer in the sector and securing a book of more than Rmb2.2bn ($360m) before printing a Rmb900m three year bond, its first in CNH.

This week's launch of RMB clearing in Germany and the completion of the first transactions shows that although there is a long term plan for an innovative clearing house structure in the country, for the moment the system is very much anchored to its first stage, clearing through Bank of China (BoC).

The Australian state of New South Wales priced a landmark debut offshore renminbi bond late in the evening Sydney time on Wednesday, riding the momentum from this week's establishment of an Australian RMB hub to shave 10bp off initial guidance and hitting its target size and funding cost.

The Australian state of New South Wales (NSW) has made good its intention of being the first Australian government entity to issue an offshore renminbi bond, with the NSW Treasury Corporation (TCorp) announcing on Tuesday that it had mandated banks for its debut issue and then launching the deal on Wednesday. The borrower is only the third non-China government entity to sell an RMB bond.

A pair of Chinese financial firms have launched offshore renminbi bonds on Wednesday, just a day before China’s Ministry of Finance begins an auction of Rmb12bn ($1.9bn) of dim sum debt.

Bank of China Sydney Branch has been appointed by the People's Bank of China (PBoC) to be an official offshore RMB clearing bank. The designation comes in a busy week for the Australian RMB business, with the two countries signing an MoU on RMB clearing and the state of New South Wales launching an RMB bond.