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Friday, 24 October 2014

BONDS: ANZ picks London for new Dim Sum

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ANZ Banking Group has bolstered London’s claim to be a global hub for renminbi trading with a Rmb1bn (US$158m) three-year bond that will be listed in the UK capital. The deal, priced on August 8, is only ANZ’s second Dim Sum print and its first with a London listing.

Source: Reuters/Luke MacGregor

The full moon rises through the Olympic Rings hanging beneath Tower Bridge during the London 2012 Olympic Games

The new 2.9% August 14 2015s priced at 101.225 for a yield of 2.474%, and was re-offered at par. That represent levels slightly inside those ANZ could achieve in other offshore markets, according to a banker close to the transaction.

It is the latest in only a handful of Dim Sum bonds to be listed in London, following similar deals from companies including oil major BP in 2011 and HSBC in April.

Standard Chartered said in May it had surpassed the Rmb1bn mark in sales of euro commercial paper, becoming the largest issuer of renminbi-denominated ECP out of London. The ECPs have tenors of three to six months. Industrial and Commercial Bank of China, the world’s largest bank, completed a Rmb100m certificate of deposit via its London subsidiary in the same month.

Banco do Brasil issued a Rmb166m two-year Dim Sum bond in July through its London branch.

With more Chinese trade now settled in renminbi, global banks are increasingly looking to raise money in that currency to match their trade finance lending.

European demand

Investors’ enthusiasm for renminbi assets has cooled in recent months amid expectations that the currency will depreciate against the safe-haven US dollar. European investors, however, have watched the Chinese unit gain almost 14% against the euro over the past 12 months.

The London listing enabled ANZ (Aa2/AA–/AA–) to diversify its investor base beyond the Asian accounts that dominated its previous Dim Sum deal, the much smaller Rmb200m 1.45% December 2012s.

European investors were allotted 29% of the new offering with the Middle East taking 10% and Asia the remaining 61%.

Banks took 37%, central banks 25%, fund managers 24% and private banks 14%.

ANZ’s self-led deal was launched off its EMTN programme and attracted orders from around 30 investors.

(Updates with re-offer price in paragraph 2.)

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