January 4, 2013 / 2:46 AM / 5 years ago

HSBC China 2-year dim sum bond priced at Shibor-60bps -sources

HONG KONG, Jan 4 (Reuters) - HSBC Bank (China) Company Limited has priced its 1 billion yuan ($160.5 million) two-year floating-rate dim sum bond at three-month Shanghai Interbank Offered Rate (SHIBOR)-60bps (basis points), two sources close to the deal said on Friday.

The initial price guidance of the senior unsecured bond was fixed at three-month SHIBOR-45bps and feedback from investors was quite positive, sources told Reuters earlier.

“The books surpassed 3 billion yuan with over 50 orders, and fund managers and banks have taken up a big part,” said one of the sources.

The three-month SHIBOR was last quoted at 3.8996 percent, which will translate to a yield of around 3.3 percent for HSBC’s rare floating-rate bond.

Fund managers and hedge funds comprised 50 percent of the transaction, followed by banks at 33 percent, private banks 16 percent and corporates 1 percent, one of the sources said.

Hong Kong investors accounted for 52 percent and the rest of Asia made up 32 percent. Europe and other countries 16 percent.

China has been actively promoting wider use of its yuan currency, also known as the renminbi, internationally and the offshore yuan bond market has been developing rapidly since the first dim sum bond was issued in July, 2007.

Total issuance volume in 2012 was 148.5 billion yuan, Thomson Reuters statistics showed.

HSBC (China) is rated A2 by Moody’s and the dim sum bond will not be rated. The coupons will be paid quarterly on Jan. 10, Apr. 10, July 10 and Oct. 10 of each year.

Before this bond, HSBC (China) sold a 1 billion yuan two-year dim sum bond priced at SHIBOR+38bps in June 2009.

HSBC is the sole global coordinator for the transaction.

Joint lead managers and bookrunners include HSBC, Bank of Communications Hong Kong Branch, China Construction Bank International, Citic Securities International, Industrial and Commercial Bank of China (Asia), and ICBC International.

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