CNH Tracker-Foreign issuers revive dim sum market after summer lull

By Michelle Chen

HONG KONG, Oct (KOSDAQ: 039200.KQ - news) 3 (Reuters) - A quiet offshore yuan bond

market is being gradually revived by foreign issuers after a

long summer lull, with energy giant BP (LSE: BP.L - news) this week becoming the

latest company to tap the market with a benchmark-size offering.

Strong demand for the third dim sum issue by a foreign

corporate in the last month bodes well for the pipeline from

multinational entities that either use the proceeds to fund

operations in China or make use of currency swaps for cheaper

funding.

BP Capital Markets, a funding arm of BP, returned to

the dim sum market on Wednesday by selling a 1.2 billion yuan

($196 million) five-year bond, which was eventually priced at

3.95 percent, about 30 pips lower than the initial guidance.

The bond was more than four times oversubscribed, with fund

managers taking up the lion's share of the issue, followed by

banks and private banks, bankers with direct knowledge of the

deal said.

Investors are hungry for dim sum bonds with good ratings and

attractive yields, especially after a dearth of issues in July

and August that saw issuance fell to the lowest level in three

years.

"BP's dim sum bond is attractive given its relative value. A

single A issue with an almost 4 percent return sounds a good

deal to us," said a fund manager in Hong Kong.

French Total Capital and South Korean SK Global sold their

dim sum bonds in September, which were also well received and

raised a combined 2.015 billion yuan.

However, issues from Chinese names remain subdued.RECENT STORIES:

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