OREANDA-NEWS. January 23, 2012. China Development Bank Corporation (CDB) officially announced its yuan-denominated bond offerings worth of RMB6 billion in Hong Kong this year, emerging as the first China-based issuer of dim sum bonds in 2012, reported the press-centre of CDB.

The scheduled sale on Thursday, fourth time for the lender, will continue its lead in market innovation by featuring the simultaneous adoption of the Hong Kong Monetary Authority (HKMA)’s Central Moneymarkets Unit (CMU) and bookbuilding in auctioning its bonds of mixed maturities. As the first domestic financial institution to adopt the dual-method of super long-dated bonds, the lender’s pioneering efforts will likely push the development of offshore RMB bond market to a new level.

According to its plan, all tranches target institutional investors. Specifically, the bookbuilding-covered portion of those with maturities of 10 years and above, are slated to open for subscription starting in mid-January. Barclays Bank Ltd., Citigroup Global Markets Ltd., HSBC, Deutsche Bank Hong Kong, Standard Chartered Bank (Hong Kong) Ltd., and Royal Bank of Scotland are joint lead arrangers and bookrunners on the deal. A CMU bidding process will be applied to the 3-year and 5-year maturities, whose auction is expected to be completed by January 13, with results to be announced on the same day. The Bank of China (Hong Kong) Ltd. acts as the issuing and lodging agent.

As the only full-functioned bond house with licensed credentials of bond issuing/underwriting, market-making, securitization etc., CDB is the largest onshore issuer of yuan-denominated financial debt, said Gao Jian, Executive Vice President of the bank. The proposed offerings aim at extending the bank's competitive advantages in RMB business to the offshore market, thus establishing a comprehensive yield curve and setting up pricing benchmarks, added Gao. For the first time, CDB will be using the proceeds in Hong Kong in support of its overseas RMB business. Moving forward, CDB will fully utilize Hong Kong as an offshore RMB center for its offshore yuan trading operations including lending, swaps, and investment.

In recent years, CDB has been actively pursuing international business expansion and is now China's biggest lender in offshore investment and financing activities, with over USD200 billion foreign currency-denominated loans outstanding, leading its peers.