China

The Republic of Indonesia is expected to pick three leads to manage an Islamic bond issue worth as much as $1bn, which could be sold as early as next month.

Chinese banks are lining up their own offshore renminbi bonds in Hong Kong. The upcoming sovereign dim sum bond from China’s finance ministry should set a benchmark for those lenders, but it is the stronger renminbi looks set to spur the demand.

Export-Import Bank of Korea (Kexim) this week gave debt bankers in Asia a flicker of hope in what was otherwise a depressingly quiet week. After turning to the offshore renminbi market for funding, it sold three small deals that beat the policy bank’s price targets.

Despite the global financial market turmoil triggered by the US credit rating downgrade, borrowers in Asia, Korean Air and McDonald’s, are hopeful to get their dim sum bond deals completed this month. Not everyone is convinced this will happen.

Asian companies hoping to raise money in the bond market had better be patient — and ready to strike at a moment’s notice, said bankers on Monday. The region’s stock markets plummeted en masse as investors dumped their holdings or took out new short positions following Standard & Poor’s downgrade of the US last week, and bankers think the psychological effect of such prolonged and violent falls will make any new bond activity unlikely.

The US credit-rating downgrade will place more pressure on China to speed up diversification of its US$3.2 trillion foreign exchange reserves, but Beijing has little options for the time being.

Hong Kong-listed automobile parts and accessories manufacturer New Focus Auto Tech has appointed Sinopac Securities to handle its debut offshore renminbi bond in Hong Kong. The proposed deal marks both the issuer and its bookrunner’s first foray into the city’s dim sum bond market.

China’s Ministry of Finance unveiled plans to issue a larger-than-expected Rmb20 billion (US$3.1 billion) dim sum bond in Hong Kong; the offering is more than double the size of its previous one and is by far the biggest sale in the fast-growing offshore renminbi market.

China Eastern Airlines Corp made its debut in the dim sum bond market this week, raising Rmb2.5bn ($388.2m) from a heavily-demanded deal, only two weeks after it became one of several companies to hold back a new issue.

China’s Ministry of Finance gave the offshore renminbi bond market a shot in the arm this week, revealing plans to raise Rmb20bn ($3.11bn).