FACTBOX-Offshore yuan market grows, more bond issues seen

HONG KONG, Feb 11 (Reuters) - China's rapidly growing
offshore yuan market is garnering global attention, with
companies lining up to issue so-called dim sum bonds in Hong Kong
and banks creating new products denominated in renminbi.

Below are a few products banks have launched, significant
bond issues and major developments in this fast-growing market.
MAJOR PRODUCTS AND DEVELOPMENTS
-----------------------------------------------------------------
Date Issuer Product
-----------------------------------------------------------------
Jan 2011 ICBC Macau Dual-tranche certificate of deposit
ICBC Macau raised 2 billion yuan from one- and two-year
certificates of deposit. This was the first of its kind.
-----------------------------------------------------------------
Oct 2010 HSBC (China) Interest rate swap with

(0005.HK)(HSBA.L) Deutsche Bank DBGKn.DE
The product enables investors to manage interest rate risk, so a
buyer of a yuan-denominated bond may want to swap fixed for
floating rates because they expect China to keep raising interest
rates to fight inflation.
-----------------------------------------------------------------
Sept 2010 Thomson Reuters, Offshore yuan prices

EBS
Both Thomson Reuters Corp (TRI.N)(TRI.TO) and EBS, which is owned
by ICAP (IAP.L), the world's biggest interdealer broker, launched
offshore yuan trading on their rival foreign exchange matching
platforms, greatly enhancing market accessibility.
-----------------------------------------------------------------
Aug 2010 Deliverable forwards
A yuan deliverable forward curve has also developed with average
daily volumes of $200-500 million, offering companies who hold
yuan a way to hedge their future yuan payables via this market
rather than the dollar/yuan non-deliverable forward market.
-----------------------------------------------------------------
-----------------------------------------------------------------
SIGNIFICANT BOND ISSUES
Outstanding yuan-denominated bonds in Hong Kong, or dim-sum
bonds, total about 80 billion yuan with a distribution ratio of
one third towards retail investors and the remainder to
institutional buyers.
-----------------------------------------------------------------
Date Issuer Amount Coupon Maturity Origin
-----------------------------------------------------------------
Jan 2011 Evergrande 9.25 bln 7.5% 3-yrs HK

(3333.HK) yuan 9.25% 5-yrs
The property company's jumbo dual-tranche synthetic bond sale was
the biggest of its kind in the nascent synthetic yuan bond
market. Total orderbook amounted to a hefty 33 billion yuan,
indicating the demand for yuan assets.
-----------------------------------------------------------------
Dec 2010 Shui On Land 3 bln 6.88% 2-yrs HK

(0272.HK) yuan
The property company set a trend with its yuan bond that would be
settled in U.S. dollars. This kind of synthetic issue draws in a
wider array of investors.
-----------------------------------------------------------------
Jan 2010 World Bank 500 mln 0.95% 2-yrs NA

(IBRD) yuan
The issue set a new low for dim-sum bond yields and came at a
time when China's stake in the World Bank is about to increase.
_________________________________________________________________
Nov 2010 China 8 bln 1%-2.48% 2- China

yuan 10-yrs
China's second sovereign issue from the offshore market
essentially formed a yield curve off which future corporate
borrowers could price their bonds.
-----------------------------------------------------------------
Nov 2010 Caterpillar 1 bln 2% 2-yrs U.S.

(CAT.N) yuan
The second blue-chip U.S. name to sell yuan bonds could herald
more companies that do business in China raising funds here.
-----------------------------------------------------------------
Oct 2010 ADB 1.2 bln 2.85% 10-yrs NA

yuan
The longest maturing offshore yuan bond met with heavy demand and
signalled that the market was gaining sufficient depth for tenors
beyond five years.
-----------------------------------------------------------------
Aug 2010 McDonald's 200 mln 3.0% 3-yrs U.S.

(MCD.N) yuan
This issuance was the first "dim-sum" bond from a multinational
company in the territory and afforded the burgeoning market
international status.
-----------------------------------------------------------------
(Compiled by Saikat Chatterjee; Editing by Chris Lewis)