Dim Sum Bond Market Surges: Guangdong Province and Hong Kong’s MTR Draw Strong Investor Interest Amid Record Issuances

Investors are showing strong interest in dim sum bonds from Guangdong province and Hong Kong's MTR. The Hong Kong Monetary Authority reports a 28% increase this year in the issue of offshore bonds valued in yuan.

The Guangdong province administration and the rail company MTR Corp have concluded offerings of yuan-denominated bonds in Hong Kong, contributing to an unprecedented surge of such issuances in the city this year.

The southern Chinese province has launched an offering worth 5 billion yuan (equivalent to US$703 million). This includes 2 billion yuan in two-year bonds, 1.5 billion yuan in three-year bonds, and 1.5 billion yuan in five-year bonds. According to a press statement from the Bank of China (Hong Kong) on Wednesday, the offering drew bids amounting to 57.18 billion yuan from investors, resulting in an oversubscription rate of 11.4 times. The Bank of China (Hong Kong), also known as BOCHK, is not only the joint lead manager and bookrunner for this sale, but also the clearing bank and the consultant for the green structure.

The market for dim sum bonds has seen significant growth this year. The first half of the year witnessed a release of more than 465 billion yuan, a rise of 28 per cent even when compared to the higher base from the same period last year, as stated by the Hong Kong Monetary Authority.