The first renminbi eurobond unravelled

Author: | Published: 20 Aug 2010

The renminbi eurobond issue by Hopewell Highway Infrastructure (HHI) has attracted unprecedented market interest. There are several reasons for this:

No PRC approvals were required for the raising of Rmb-denominated funds from sources outside the PRC.

Bond issues (for banks, certificates of deposit) and bank loans are currently available channels for foreign issuers worldwide.

Renminbi proceeds may be used freely outside the Mainland or for trade settlement purposes (ie, current account items) with many Mainland businesses under the recently expanded pilot scheme.

Appropriate PRC approvals remain necessary if proceeds are to be remitted into the Mainland as foreign investment (ie, on capital account).

These developments illustrate strong support from both PRC and Hong Kong governments for the further internationalisation of the renminbi, and for the development of Hong Kong as the predominant offshore centre for the settlement of renminbi transactions, pending convertibility of the renminbi.

The HHI renminbi eurobonds and...