A comprehensive guide to understanding and assimilating into
dim sum bond markets
The expansive growth of the dim sum bond market in the last five
years has peaked investor interest and inspired companies to seek
out investing opportunities that negate China’s capital controls.
In a four-pronged approach, Dim Sum Bonds examines the development
of the dim sum bond market and its role in China’s RMB
internationalization policy, characteristics of dim sum bonds and
its market, investors’ investment objectives and the investment
performance of dim sum bonds, motivations of issuers, and
underwriters’ roles in the dim sum bond market. You will
familiarize yourself with every aspect of the dim sum bond market
from an issuer, an investor, and an underwriter’s perspective.
Academics, financial advisors, investment bankers, underwriters,
investors, and policy makers should not be without this informative
and detailed guide to the offshore market central to China’s
internationalization of RMB.
* Written by Hung-Gay Fung, Glenn Chi-Wo Ko, and Jot Yau, all of
whom are experts on the dim sum bond market
* Explains the rapidly expanding dim sum bond market and puts
readers ahead of the curve
* Landmark issues, Chinese banks (China Development Bank),
Infrastructure, red-chip companies (Sinotruk), and multinational
corporations doing business in China (Mc Donald’s) are
discussed in detail.
Covering landmark issues from a variety of Chinese and
multinational corporations, Dim Sum Bonds provides must-read manual
to understanding the vast opportunities of this up-and-coming
market.
Tabella dei contenuti
Preface xi
Acknowledgments xvi
List of Acronyms and Key Terms xvii
Chapter 1 New Market–Developments, Opportunities, and Challenges 1
1.1 Introduction 1
1.2 Overview of the Dim Sum Bond Market 6
1.3 Policies Supporting the Growth of Offshore Renminbi 8
Chapter 2 Offshore RMB-Denominated Bonds–Dim Sum Bonds 21
2.1 Definition 21
2.2 Bond Issue Characteristics 24
2.3 Conclusion 46
Chapter 3 Issuers 49
3.1 Issuers 50
3.2 Classification of Issuers by Type of Organization 52
3.3 Classification of Issuers by Industry 60
3.4 Classification of Issuers by Domicile and by Deal Nationality 63
3.5 Motivations behind Issuers 67
3.6 Conclusion 75
Chapter 4 Investors 79
4.1 Investor Type and Mix 80
4.2 Motivation 82
4.3 Risk/Return Analysis 86
4.4 Conclusion 98
Chapter 5 Investment Banks and the Dim Sum Bond Issuing Process 101
5.1 Dim Sum Bond Issuing Process 101
5.2 Primary Issues 104
5.3 Bookrunner/Manager Rankings 116
5.4 Bond Issuing Fees 118
5.5 Retail versus Institutional Tranches 118
5.6 Conclusion 119
Chapter 6 Case Studies of Landmark Issues 121
6.1 Landmark Issues 121
6.2 Case 1: The First Dim Sum Bond and the First Chinese Financial Institution Issuer–China Development Bank (and the First 15-Year and 20-Year Bonds) 126
6.3 Case 2: The First Dim Sum Bond Issued by a China-Incorporated Foreign Bank–The Bank of East Asia (China) Limited 131
6.4 Case 3: The First Dim Sum Bond Issued by the Chinese Central Government 135
6.5 Case 4: The First Dim Sum Bond Issued by a Foreign Multinational Corporation–Mc Donald’s Corporation 137
6.6 Case 5: The First Dim Sum Bonds Issued by a Supranational Agency–Asian Development Bank (and the First 10-Year Dim Sum Bond) 142
6.7 Case 6: The First Dim Sum Bonds Issued by a Chinese Company, Incorporated Outside Mainland China and Listed in Hong Kong (Red-Chip Corporation)–Sinotruk (Hong Kong) Limited 145
6.8 Case 7: The First Mainland Chinese Corporation Listed in Hong Kong (H-share) Issuer of Dim Sum Bonds–Beijing Capital Land Ltd. 149
6.9 Case 8: The First PRC-listed (A-Share) Issuer of Dim Sum Bonds–Gemdale Corporation 153
6.10 Conclusion 157
Chapter 7 Conclusion 159
7.1 Review and Preview of the Development and Growth of the Dim Sum Bond Market 159
7.2 Market Participants 166
7.3 Ongoing Developments Affecting the Dim Sum Bond Market 174
7.4 Final Remarks 176
About the Authors 179
Index 181
Circa l’autore
HUNG-GAY FUNG, Ph D, is Curators’ Professor of Finance, Dr. Y. S. Tsiang Endowed Chair Professor of Chinese Studies, and department chair in the Finance and Legal Studies Department, College of Business Administration, University of Missouri-St. Louis. His areas of research and teaching include international finance, financial risk management, and banking.
GLENN KO, CFA, is an executive director of the UBS Asian Credit Research team, covering corporate credits. He focuses on Chinese properties and industrials. He has extensive experience in Asia’s straight and convertible bond markets, with previous work experience in proprietary trading desks, sell-side research, and rating advisory at financial institutions, such as Daiwa, JPMorgan and HSBC.
JOT YAU, Ph D, CFA, is Dr. Khalil Dibee Endowed Chair in Finance at the Albers School of Business and Economics, Seattle University. Since joining Seattle University in 2001, he has served as the chair of the department of finance and MSF program director. He cofounded Strategic Options Investment Advisors Ltd., a Hong Kong-based investment advisory firm.
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