China

Bangkok Bank kicked off a two week sale of subordinated notes this week, turning to local investors for Bt20bn ($650m) of funding that it could use to buyback costly long-dated dollar bonds.

Higher yields and a backdrop supportive to renminbi appreciation mean that investor demand for dim sum will pick up during what is set to be another stellar year for Asian fixed income.

Central Plaza Development built one of the year’s largest orderbooks for a dim sum deal late last week, after yield-hungry investors turned out in force for its three year offering.

Insurance companies in search of longer-dated dim sum bonds convinced Volkswagen International Finance to launch a five year renminbi deal last week, and reverse enquiry from Asian investors — as well as obvious name recognition from buyers in Europe — ensured a smooth execution for the issuer. But the five year tenor is still unlikely to become a typical choice for issuers, said bankers.

Waiting for free convertibility of the renminbi will be to ‘miss the boat’ but the opening up of the China’s capital account is already happening, says the law firm.

A move by China to liberalise rates would cause bond prices to reset, negatively impacting the the bond markers, but views are divided over when liberalisation will take place.

Agricultural Bank of China (ABC) and China Construction Bank (CCB) launched three year dim sum deals on Tuesday, taking very different approaches to marketing and how to target investors — but ending up with exactly the same result.

The clock is ticking for Australian bank funding officials, who now have fewer than six weeks before any new bonds must comply with stricter Basel rules. National Australia Bank beat the clock this week with a A$950m ($984m) deal, but its peers are mostly well-funded and tired of being told to take advantage of a closing window.

BOCHK Asset Management prefers renminbi-hedged high yield US dollar bonds from China property companies as they can return up to twice as much as identical offshore RMB credits.

Agricultural Bank of China (ABC) and China Construction Bank (CCB) launched three year dim sum deals on Tuesday, taking very different approaches to marketing and how to target investors — but ending up with exactly the same result.

Delays to the establishment of Taiwan’s renminbi clearing bank are more down to pride and turf wars than administrative problems and should act as a cautionary tale to other offshore renminbi wannabes.