China

The European market was not the only one to feel the reverberations from the sovereign crisis this week. Earlier in the week, Swedish lender Nordea was forced to abandon its debut Samurai deal, EuroWeek understands, while Rabobank had to modify guidance on its deal.

Top 3 Offshore RMB DCM Transactions - 2011 YTD

Dim sum bond investors are becoming increasingly aggressive, demanding tighter covenant packages that could put issuers off bringing deals. Bankers and investors see it as a sign of the greater maturity and efficiency of the growing market.

Lafarge Shui On Cement, a Sino-French joint venture, raised Rmb1.5bn ($236.2m) in the offshore renminbi market this week. Bankers said the deal proved there is still life in the dim sum market — as long as an issuer is willing to pay up.

Dim sum bond investors are becoming increasingly aggressive, demanding tighter covenant packages that could put some issuers off the market, according to analysts at Moody’s. Investors said it was a sign of a more mature approach to the market, which puts more emphasis on credit concerns than currency gains.

China’s Home Inns & Hotels Management has got two commitments worth $45m for its $240m acquisition financing, which will be used to buy local rival Motel 168. Funding officials from the company met potential lenders on a roadshow last week, and the leads are now deciding how much of the deal they want to sell down.

The offshore renminbi market has been hit hard over the last few months, falling victim to macro risks that at one point the market seemed almost immune to. But that has created some opportunities for investors, and analysts at Standard Chartered recommended their clients got back into some deals at the end of last week.

The New York-based investment bank announced the launch of a new index designed to track the performance of off-shore renminbi bonds in Hong Kong.

The municipal bonds to be issued by four provincial governments in the mainland on a trial basis will have negative implications on both government bonds and rates markets, says the British bank.