Chinese issuers have started returning to the long-forgotten offshore renminbi bond market after a lapse of five months as uncertainties rise in the onshore bond market and Beijing strengthens measures to check capital outflows.
Shenzhen-based property developer Fantasia Holdings on Wednesday announced it would issue 600 million yuan of senior notes due 2019, with a coupon of 9.5 per cent. This is the first offshore renminbi bond in Hong Kong, popularly known as dim sum bond, to be issued by a Chinese company this year.
Because of ample liquidity in China, lower cost of raising funds and yuan's devaluation, capital-intensive Chinese real estate firms – the main issuers of dim sum bonds as well as offshore dollar bonds – had shifted to the domestic bond market in the second half of last year. As a result, just five dim sum bonds were issued by Chinese developers last year, compared with 15 in 2014, shows Dealogics data.
But there are signs bond issuers are beginning to head in the other direction.