China corporate panda success limited by pricing

Author: Ashley Lee | Published: 2 Apr 2014

German car manufacturer Daimler became the first foreign corporate to sell Chinese onshore bonds, so-called panda bonds, last month. But lawyers believe that unfavourable pricing will limit future deals.

Corporates have tapped the offshore renminbi market – the dim sum bond market – in the past for renminbi-denominated funding. But they must receive permission from Chinese regulators to remit the currency back onshore. Panda bonds are sold onshore, where it is easier for issuers to use their proceeds because they don’t need to be remitted.

However, a...