HONG KONG, March 27 Foreign investors were
active in offshore yuan bond issuance this week, with 45 percent
of Renault's dim sum bond allocating to investors outside of
Hong Kong, according to a term sheet seen by Reuters on
The French automaker sold a three-year senior unsecured yuan
bond at 4.65 percent, raising 750 million yuan ($120.8 million).
Total orders exceeded 1.2 billion yuan from 60 investors.
Hong Kong investors accounted for 55 percent, followed by
Singapore at 24 percent, Switzerland at 8 percent, other parts
of Europe at 9 percent and other parts of Asia at 4 percent, the
term sheet showed.
Fund managers and private banks swallowed the biggest part
of the transaction at 62 percent and 24 percent, respectively.
The rest went to banks (8 percent), hedge funds (3 percent) and
other investors (3 percent).
Renault sold a 750 million yuan two-year dim sum bond last
October with a coupon of 5.625 percent and later reopened it to
bring the total size to 1.25 billion yuan.
HSBC and Industrial and Commercial Bank of China (Asia) are
In a deal priced a day earlier, Dorsett Hospitality
International, a subsidiary of Far East Consortium
International, sold a 850 million yuan five-year dim
sum bond at 6 percent.
The unrated bond attracted 2.7 billion yuan from 80
accounts. Singapore investors took 38 percent, following Hong
Kong accounts' 53 percent.
Market participants say yuan assets remain attractive to
global investors in a low-interest rate environment, given the
relatively strong performance of the yuan and dim sum
Yield-hungry investors are moving to the offshore yuan bond
market in search of higher returns, flocking to three high-yield
bonds issued in the past week which were all priced higher to
yield lower than initial guidance due to strong demand.
The total return on dim sum bonds has been rising since the
beginning of 2012 where it stood at the 100 area and it reached
105 on Wednesday, according to HSBC statistics.
($1 = 6.2110 Chinese yuan)
(Reporting by Michelle Chen; Editing by Eric Meijer)