Greater China

A long-awaited first default in the Chinese onshore bond market looked inevitable late on Tuesday night when Shanghai Chaori Solar Energy Science and Technology Company posted an announcement on the Shenzhen Exchange saying that it would not be able to pay creditors when its second annual interest payment of Rmb89.8m falls due on Friday.

The International Financing Corp provided offshore renminbi investors with much sought after AAA-rated credit exposure, pricing its Rmb1bn ($163m) three year deal on Tuesday, as investors continued to react to increasingly negative emerging market headwinds.

Ping An Bank is to price an offer of up to Rmb9bn ($1.46bn) of tier two Basel III compliant bonds on Thursday March 6, in what will be the third — and biggest — Basel III deal in China so far. Ping An has a total Basel III quota of Rmb15bn.

The International Finance Corporation released guidance on a new short three year offshore renminbi (CNH) bond on Monday, March 3.

Gemdale (Asia) Investment issued a Rmb300m ($49m) tap of its existing three year bond on Friday, just two days after pricing the original deal. The tap was driven by reverse inquiry from a sole investor, though bankers away from the deal have questioned the unusual move.

Bank of China (Singapore) priced the year’s first offshore renminbi bond aimed at Singapore on February 25. It amassed a huge order book as investors took advantage of a rare opportunity to buy into a five year investment grade dim sum bond.

BP Capital Markets priced its latest dim sum bond on Monday and was forced to offer generous guidance over its existing curve to stand out in a very busy market. However, investors still flocked to take advantage of the attractive pricing and a quality multinational credit, with the order book closing at Rmb3.6bn ($571m).

The International Finance Corporation is expected to sell its first offshore renminbi bond listed in London as early as next week in a bid to diversify its investor base in the currency.

Dim sum regular Caterpillar opted to price its latest dim sum deal wider than other recent bonds from multinational corporates on Monday night, with a view to shoring up demand for future issues.

The renminbi’s dramatic plunge during recent days came as a nasty shock to the consensus opinion to hold a long position in the currency.

February proved to be another blow-out month for offshore renminbi issuance despite a storm of negative headlines from China and concerns about the sudden depreciation of the currency. But the fun isn’t over as a high volume of redemptions, favourable arbitrage opportunities and the participation of multinational corporates means the pipeline remains strong, write Virginia Furness and Isabella Zhong.

Unilever refinanced a three year dim sum bond at 2.95% on February 21, much higher than the original bond’s coupon of 1.15%, as the market grows increasingly investor friendly.