US Dollar Bond Offerings from Large Chinese Issuers
Chinese State Owned Enterprises (SOEs) and Local Government Financing Vehicles (LGFVs) regularly issue US Dollar denominated bonds in order to raise capital for major industrial and infrastructure investment projects.
Shanghai Quanshan Business Consulting Co., Ltd. helps foreign funds and institutions identify upcoming issues meeting their particular investment criteria.
2023 Market Overview & Highlights
At present, the supply of Chinese-issued US dollar bonds consists mainly of financial, telecommunications, chemical, energy, urban investment, and real estate industry issuances.
Investment opportunities may arise from yield changes on investment-grade corporate and state-owned enterprise (SOE) USD bonds, as well as shifting spreads against foreign USD benchmarks.
For real estate bonds, the focus is on highly-rated state-owned enterprises, high-quality mixed-ownership reform enterprises, and leading private enterprises. There is increasing policy support for the real estate industry at all levels, and sales and financing are expected to continue improving.
Preferred urban investment bonds are from high-quality, highly-rated companies, located primarily in wealthy and economically stable provinces such as Zhejiang, Shandong, Sichuan and Jiangsu. Areas with weak refinancing capacity and high financial stress should generally be avoided.
The core holders of Chinese-issued US dollar bonds are high-quality investors, such as domestic and foreign financial institutions, well-known overseas hedge funds, and other institutions.
Investor access to these types of bonds is often quite limited, as they are syndicated and issued privately and may not be actively traded on secondary markets.