By Reuters – Global Times Source:Agencies Published: 2013-3-24 23:28:02
China Minmetals Corporation, a State-owned enterprise, completed its sale of a 2.5 billion yuan ($402.3 million) three-year dim sum bond in Hong Kong Friday, which attracted more than 12 billion yuan in orders and saw strong interest from central banks.
It was the fourth firm to tap the 25 billion yuan quota granted by the National Development and Reform Commission to five mainland firms last year to issue yuan bonds offshore.
"Demand was quite strong and the orders had already surpassed 2 billion yuan within an hour after the books opened," said a source close to the deal, adding the price guidance was later tightened to 3.65-3.75 percent from the initial 3.85 percent area.
Foreign central banks have not been frequent investors in dim sum bonds but have at times in the past bid for very high-quality names.
The senior unsecured offshore yuan bond was finally priced at 3.65 percent, and the proceeds will be used for general corporate use, according to a term sheet seen by Reuters. Neither the issuer nor the bond is rated.
The total order book for China Minmetals' dim sum bond was more than 12 billion yuan from 106 accounts, including central banks, which took 16 percent of the deal.
No central bank buyer was named in the Reuters report.
Fund managers comprised 48 percent, while banks and private banks accounted for 26 percent and 10 percent, respectively.
"You don't usually see a State-owned company name in this market and investors just grabbed it once it came out," said another source with direct knowledge of the deal.
"Investors like it because it's a high quality issuer and the name is well known, not just to those central banks, but also other investors," the source said.
HSBC, DBS Bank, Industrial and Commercial Bank of China (Asia), Agricultural Bank of China International and Standard Chartered Bank are the joint lead managers and bookrunners.
Analysts say lack of supply and relatively higher yields in the dim sum bond market will continue to attract more investors, especially as confidence in China's economy has improved, supporting the yuan.