China

Top 3 Offshore RMB DCM Transactions - 2012 YTD

Note: excludes money market and short-term debt as per Dealogic standard

Note: excludes money market and short-term debt as per Dealogic standard

Russian lender VTB Bank raised Rmb1bn ($239.4m) after returning to the offshore renminbi bond market following two years of absence, defying scepticism from some rival bankers that the deal was too tightly-priced to be successful.

The island is set to become the latest country to allow for offshore renminbi products, including bonds. By doing so, its banks hope to open a new source of revenue. Matthew Montagu-Pollock reports.

The Philippines’ SM Investments Corp and Hong Kong’s Lifestyle International Holdings extended their debt maturities this week, raising a combined $800m and taking advantage of cheap long-term funding rates.

Hong Kong banks could potentially obtain higher margins from recent rise in CNH deposit rates, but only if China relaxes lending restrictions to higher-yielding onshore markets, say experts.

Non-Asian issuers will need to pay a premium to issue a dim sum bond, but can also leverage off their strong capital market records and corporate governance.

The underperformance of offshore renminbi government bonds relative to investment grade corporate bonds is expected to reverse on improved liquidity in the short term, says HSBC.

Korea Finance Corp is selling a public dim sum bond before the end of this year, after making its offshore renminbi debut with a Rmb130m ($20.55m) private placement last week.