What's next for China's offshore RMB market

Author: Ashley Lee | Published: 10 Apr 2013


· China Minmetals’ 3.65% three-year Regulation S bond was the largest single-tranche offshore renminbi bond among China's five state-approved issuers;

· The bond mitigated risk related to State Adminstration of Foriegn Exchange (SAFE) registration with a put option rather than placing funds in offshore escrow, signaling that investors are more comfortable with these issuances;

· Expect more SOEs to issue offshore renminbi bonds in the future, although funding costs are a concern.

Chinese state-owned entity (SOE) China Minmetals last month issued the largest single-tranche offshore renminbi bond among state-approved issuers. Here's how these issuances have evolved since Baosteel’s first offshore renminbi bond.

The RMB2.5 billion three-year bond, issued under Regulation S, priced at 3.65% on 21 March. It represents the company’s first bond in the global...