Dim sum bonds are

bond Bond or bonds may refer to: Common meanings * Bond (finance), a type of debt security * Bail bond, a commercial third-party guarantor of surety bonds in the United States * Chemical bond, the attraction of atoms, ions or molecules to form chemica ...

s issued outside of China but denominated in

Chinese renminbi The renminbi (; symbol: ¥; ISO code: CNY; abbreviation: RMB) is the official currency of the People's Republic of China and one of the world's most traded currencies, ranking as the fifth most traded currency in the world as of April 202 ...

, rather than the local currency. They are named after

dim sum Dim sum () is a large range of small Chinese dishes that are traditionally enjoyed in restaurants for brunch. Most modern dim sum dishes are commonly associated with Cantonese cuisine, although dim sum dishes also exist in other Chinese cuis ...

, a popular style of cuisine in southern China.

History and use

The first dim sum bond was issued by the

China Development Bank The China Development Bank (CDB) () is a development bank in the People's Republic of China (PRC), led by a cabinet minister at the Governor level, under the direct jurisdiction of the State Council. As one of three policy banks in China, it ...

in July 2007. Until July 2010, only Chinese and Hong Kong banks could issue renminbi-denominated bonds;

deregulation Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a ...

led to the development of an offshore market in renminbi and the internationalization of dim sum bonds. The bonds became more popular as foreign companies sought yuan-denominated assets as the renminbi appreciated in 2011. Although the major market for dim sum bonds is Hong Kong,

China Construction Bank China Construction Bank Corporation (CCB) is one of the " big four" banks in China. In 2015, CCB was the 2nd largest bank in the world by market capitalization and 6th largest company in the world. The bank has approximately 13,629 domestic bra ...

became the first Chinese Bank to issue a renminbi denominated bond in London in November, 2012. This followed similar issues by non-Chinese banks like

ANZ ANZ may refer to: People * Anz (musician), a British DJ and electronic musician Banks * ANZ (bank), Australia and New Zealand Banking Group Limited, the fourth-largest bank in Australia ** ANZ Bank New Zealand, the largest bank in New Zealand ** ...

HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tri ...

and

Banco do Brasil Banco do Brasil S.A. ( en, Bank of Brazil) is a Brazilian financial services company headquartered in Brasília, Brazil. The oldest bank in Brazil, and among the oldest banks in continuous operation in the world, it was founded by John VI, King ...

earlier in the year. 35.7 billion yuan in dim sum bonds were issued in 2010 and 131 billion in 2011. The first foreign-issued dim sum bond by a nonfinancial company was announced on August 19, 2010 and issued on September 16, 2010 by

McDonald's McDonald's Corporation is an American Multinational corporation, multinational fast food chain store, chain, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechri ...

. On 5 November 2013,

British Columbia British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, ...

finance minister

Mike de Jong Mike de Jong, (born 1963 or 1964) is a provincial politician and was cabinet minister of the Legislative Assembly of British Columbia. Early life De Jong was born to Dutch parents who immigrated to Canada after Canadian soldiers liberated th ...

reported a successful placement of Chinese RMB$2.5bn in dim sum bonds, listed January 14, 2014 on the

Luxembourg Stock Exchange The Luxembourg Stock Exchange, LuxSE (french: Bourse de Luxembourg) is based in Luxembourg City at 35A boulevard Joseph II. The chairman of the board is Alain Kinsch and the chief executive officer is Julie Becker. The exchange has pre-opening ...

. The issue was five times oversubscribed. Some Indian companies participate in the dim sum bond market, one of them being IL & FS Transportation networks (a subsidiary of the giant lender IL & FS Financial Services).

Sources

{{reflist Bonds in foreign currencies Renminbi

History and use

See also

Sources