appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Yulu Ao

Hong Kong’s offshore yuan bond market has seen another record-breaking deal – the largest single issuance by a Chinese state-owned enterprise – underscoring the growing appeal of the city’s dim sum bond market.
State Grid Corporation of China raised 14.9 billion yuan (US$2.2 billion) through offshore yuan-denominated bonds, known as dim sum bonds, according to a statement on Monday from Bank of China, which acted as a joint global coordinator for the deal.
The offering comprised 3.9 billion yuan of five-year bonds priced to yield 1.86 per cent, 7 billion yuan of 10-year notes at 2.18 per cent and 4 billion yuan of 20-year debt at 2.46 per cent.
Investor demand reached a record high, with orders totalling 193.8 billion yuan, more than 13 times the amount on offer, according to the bank.
The deal comes as Hong Kong’s dim sum bond market continues to expand. Nearly 500 billion yuan of offshore yuan bonds were sold in the first seven months of the year, according to Bank of China. The lender said it underwrote more than 100 billion yuan during the period.
Hong Kong Financial Secretary Paul Chan Mo-po, speaking at an August 3 event, said annual dim sum bond issuance had reached 1 trillion yuan in the past two years, with the outstanding bond size standing at around 1.6 trillion yuan.
State Grid’s deal adds to a string of heavily subscribed dim sum bond offerings this year, as lower yuan borrowing costs and growing investor demand fuel an expansion of the offshore market.
Dim sum bond sales rose more than 60 per cent year on year in the first half, while borrowers increasingly tapped longer-dated debt at lower yields, according to an August 9 report by Goldman Sachs.
The latest expansion, which began in 2022, featured longer maturities, lower issuance yields and a broader issuer base, marking a shift from the yuan appreciation-driven boom of 2011 to 2014, Goldman said.
Excluding local government financing vehicles, the weighted-average maturity of dim sum bonds increased to 5.8 years in the second quarter, up from 3.3 years in the fourth quarter of 2023, Goldman said. Over the same period, the weighted-average yield on three-year dim sum bonds fell to 2.1 per cent from 3.5 per cent.
The current cycle has been driven primarily by lower yuan funding costs compared with major currencies, making yuan borrowing increasingly attractive to both mainland Chinese and international issuers, according to the investment bank.
The trend also aligns with Beijing’s push to deepen cross-border use of its currency and bond markets.
Meanwhile, overseas institutions held 3.21 trillion yuan of bonds in mainland China’s onshore interbank market at the end of July, equivalent to 1.8 per cent of the market, according to the People’s Bank of China.
More than two-thirds of overseas investors entered via the Bond Connect programme, central bank data showed.


Hong Kong unveils gold, bond and liquidity plans to drive next phase of yuan adoption

Hong Kong regulators to flesh out new yuan strategy after Beijing meetings

How will Japan’s rate increase affect capital flow in global financial markets?

Exchange Fund weighs bigger gold holdings to support Hong Kong’s trading hub plan

Bonds

Hong Kong’s dim sum bond market hits new heights as State Grid deal draws record orders

Nearly 500 billion yuan of offshore yuan bonds were sold in the first seven months of the year, according to Bank of China. Photo: AFP

Appetite for yuan assets sees London Clearing House accept dim sum bonds as collateral

Yuan notes. Photo: Getty Images

The London Clearing House headquarters are in the City of London, the British capital’s main financial district. Photo: Getty Images

Chinese commercial banks gain margin relief, but subdued lending dims outlook

A woman walks past a row of buildings in Beijing’s central business district on July 31. Photo: EPA

Panda bond boom offers ‘historic’ yuan chance, but cheap funding not enough: Goldman Sachs

Yuan notes are counted at a bank in China’s Jiangsu province. According to a Goldman Sachs analyst, “the current bond-issuance boom is a historic opportunity”. Photo: Reuters

Pan Gongsheng, governor of the People’s Bank of China, speaks at the Lujiazui Forum in Shanghai on June 17. Photo: Reuters

China’s JD.com returns to dim sum bond market with 10b yuan offering

S&P Global Ratings has assigned an ‘A-’ long-term rating to JD.com’s notes. Photo: Reuters

Jim Rogers talks up the Chinese yuan amid fears of a US market crisis

Legendary American investor Jim Rogers speaking at an investor event in Hong Kong on Saturday. Photo: Themis Qi.

The Chinese yuan will be fully convertible in the future, American investor Jim Rogers said in an interview in Hong Kong on Saturday. Photo: DPA

Business

China Business

Banking & Finance

News

Lower yuan borrowing costs and longer maturities lure issuers, marking a fresh phase in the city’s expanding offshore market


Lower yuan borrowing costs and longer maturities lure issuers, marking a fresh phase in the city’s expanding offshore market.


Hong Kong’s dim sum bond market hits new heights as State Grid deal draws record orders

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Lower yuan borrowing costs and longer maturities lure issuers, marking a fresh phase in the city’s expanding offshore market

Lower yuan borrowing costs and longer maturities lure issuers, marking a fresh phase in the city’s expanding offshore market