UPDATE 1-China Development Bank to sell at least 3 bln yuan dim sum bond -sources

Mon Nov 4, 2013 11:55pm EST

* CDB bond to have 3-4 tranches

* Two-year tenor to carry a floating rate

HONG KONG, Nov 5 (Reuters) - China Development Bank will return to the offshore yuan debt market and start selling at least 3 billion yuan ($492 million) in bonds on Wednesday, two sources with direct knowledge of the deal said.

The bonds by the state-owned policy bank will be part of a fresh batch of quotas granted by the National Development and Reform Commission (NDRC) to mainland issuers to tap the dim sum market. The pipeline may be as strong as 75 billion yuan of bonds.

The China Development Bank (CDB) bond will comprise at least three tranches, namely 2-year, 5-year and 10-year tenors. An extra tranche of 30-year tenor is also being considered with the aim of extending the benchmark curve in the dim sum market.

"The announcement will come out quite soon and roadshows will begin tomorrow," one of the sources told Reuters on Tuesday.

The bank hopes to make the 2-year tenor tranche a floating-rate note with reference to a newly-launched CNH Hibor rate in the former British colony, while the rest of the tenors will carry fixed rates, the sources said.

Germany's Landeskreditbank Baden-Württemberg-Förderbank (L-Bank) last week sold the first yuan floating-rate debt in Hong Kong since the CNH Hibor was created in June.

CDB is no stranger to the burgeoning offshore yuan bond market, as it issued Hong Kong's first dim sum bond, in July 2007.