October 18, 2016 / 2:16 AM / a year ago

Wharf Holdings completes sale of 4 bln yuan panda bonds in China

HONG KONG, Oct 18 (Reuters) - Hong Kong-based Wharf Holdings Ltd’s 4 billion yuan ($599.84 million) issuance of “panda bonds” in China was three times oversubscribed in a sale that signalled rising interest for onshore yuan-denominated debt.

Wharf is the first Hong Kong property developer that has obtained approval to issue panda bonds, or yuan-denominated bonds sold by foreigners on the mainland, with an aggregate amount not exceeding 20 billion yuan.

The first tranche of 4 billion yuan three-year medium term note was oversubscribed by three times, the company said.

Both Wharf and this tranche of the Programme have received AAA credit rating in the mainland.

The panda bond market kicked off in 2005, but its development had lagged far behind yuan-denominated bonds sold in the offshore market, also known as dim sum bonds, until last year when Chinese issuers switched back to the onshore market to raise cheaper funds.

Panda bond issuance in the first nine months this year amounted to 84.2 billion yuan, compared to 89.4 billion for dim sum bonds, statistics from Bank of China International showed.

Market players believe panda bond issuance is set to exceed that of dim sum bonds in the coming months as cost for issuers to raise onshore yuan remains favorable thanks to ample onshore liquidity. ($1 = 6.6685 Chinese yuan renminbi) (Reporting by Michelle Chen; Editing by Shri Navaratnam)

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