China: Two steps towards internationalized renminbi
Hopewell, Citic Bank issue in Hong Kong; Interbank market, investment products launched
Two issuers took advantage of Beijing’s continuing drive to internationalize the renminbi, using the looser restrictions on offshore issuance to complete debt deals in Hong Kong last month.
Hopewell Highway Infrastructure became the first non-mainland-domiciled corporate to issue renminbi-denominated bonds outside the People’s Republic when it raised Rmb1.38 billion ($203 million) in two-year notes, with Bank of China acting as sole bookrunner. The company, a Hong Kong-based toll road operator, will use the funds to help finance the construction of an expressway in China’s Pearl River delta region.
The other deal involved Citic Bank International (CBI), the Hong Kong subsidiary of China Citic Bank, issuing the first-ever offshore renminbi certificate of deposit in the form of a $500 million one-year note with a coupon of 2.68%. HSBC acted as sole bookrunner of the deal. Woody Chan, treasurer of CBI, said in a statement that the funds would "enhance [CBI’s] working capital for trade finance and optimize [our] Rmb asset and liability position".
"The deposit base for renminbi in Hong Kong stands at around Rmb85 billion now, and could reach Rmb100 billion by the end of the year"
Gina Tang, HSBC
The deals are further milestones on the path towards internationalization of the renminbi via the development of viable offshore bond markets in the currency.