French renminbi first highlights China investment pitfalls

Author: Gemma Varriale | Published: 28 Sep 2011

Air Liquide, a technology company, has become the first French issuer of renminbi denominated bonds.

The bonds, totalling Rmb 2.6 billion, ($406 million) were issued on September 19. HSBC, Bank of China, ICBC and Standard Chartered were joint lead managers.

The landmark deal also marks the largest renminbi amount ever raised by a European company.

Cenzi Gargaro of Linklaters in Paris believes that the bonds will be popular with companies which, like Air Liquide, have industrial projects and need to invest renminbi funds onshore to develop their business.

"I think any company that has plans for direct investments or joint ventures in China will be looking to this as a way of funding its activity," added Gargaro.

The two tranches are five and seven years. The seven year tranche is the longest that has even been done in offshore renminbi.

Discretionary authorisation

The bonds form part of the...