The offshore renminbi-denominated bond market has seen its first dual-market issue through a Rmb1 billion ($164 million) deal from Export-Import Bank of Korea (Kexim).
Kexim adopted the structure last week when it issued Rmb500 million in each of Taiwan’s Gretai Securities Market and Singapore’s stock exchange.
“The issuer would like to develop the renminbi market, besides purely raising funds,” said a source familiar with the situation. “The dual-market issue is the best way to develop both the (Taiwan and Singapore) market at the same time.”
Kexim becomes the first issuer from Korea to tap Taiwan’s renminbi-denominated bond market, also called the Formosa bond market, because some Taiwanese insurance investors have expressed strong interest in long-term notes from the issuer.
The issuer’s 10-year tenor, a rarely seen tenor in the CNH bond market, improves the curve of the CNH bonds.
“The renminbi bonds are normally of shorter tenors like three-year or five-year, and the longer ones like 10-year or 15-year are usually from Chinese banks,” said the source.
The 5-year notes in the Singapore market were priced at 3.625% at par, and the 10-year ones at 4.5% at par.
The book attracted demand of Rmb1.5 billion from 38 accounts, leaving it 1.5 times covered. Asian investors took the majority - 97% - and European investors got the rest 3%.
For the 5-year tranche, fund managers bought 79%, banks 14% and private banks 7%. For the 10-year portion, insurance companies took 95% and fund managers 5%.
The issuer was rated at Aa3/A+/AA- (Moody's/S&P/Fitch), while the notes are expected to be rated at Aa3 by Moody's.
HSBC was sole bookrunner on the deal.
