The domestic Chinese CB market has existed for many years but issuers have largely ignored it. Most of the CBs in the past were done by small and mid-cap domestic companies and in the Rmb300m–Rmb1bn (US$40m-$147m) range. The top rated issuers preferred to raise capital by issuing bonds-plus-warrants or straight equity. So when BOC flagged a plan to tap this market, it surprised market players with many believing that the deal might struggle. But BOC proved critics wrong. It raised the intended R

ABC has caught the world’s attention with its plans for a dual Shanghai and Hong Kong listing that could set an IPO record. China’s third-largest lender was set to kick off bookbuilding for its jumbo float on June 24, while investors warned that the deal’s success would depend on the bank’s target valuation. Since ABC’s bankers started pre-marketing the deal on June 14, two opinions have emerged as to the right price for the lender’s shares. On one side are nervous international investors, despe

A growing number of Chinese companies are turning to trusts for funding, putting this innovative financing product on the radar of domestic regulators and international banks. A State Council think tank has estimated that trusts have provided nearly Rmb1.9trn (US$279bn) of funding as of April this year, as measured by assets under management. That is an 18.75% jump in just four months, from an estimated Rmb1.6bm at the end of 2009 — enough to attract a warning from the government body for partic

Many Chinese developers have found success in the high-yield bond market this year. For example, in April 2010 two developers launched in considerable size in the same week: Yanlord Land, rated Ba2/BB, raised US$300m, and Agile Property, rated Ba3/BB, raised US$650m. Other PRC property developers to have raised funds have included Kaisa, Renhe Commercial Holdings and (on the equity side) Shimao Property. Many considered these bonds to be a sign of issuers looking for alternative funding sources

The China Banking Regulatory Commission remains concerned about excessive lending and used its annual report, published this month, to repeat warnings and highlight the measures it is taking to slow the sector’s growth. The report said lending reached record levels last year, with total outstanding Renminbi-denominated loans growing by 32% to Rmb9.59trn. “The soundness of the banking sector is being tested by the increasing pressure of an NPL rebound,” said the report, indicating that credit tig

But people are looking nervously at China for several reasons. Most obviously, such a rate of growth is both unsustainable and undesirable; already there are fears of overheating across the economy, particularly in property. Reining in liquidity through austerity measures is a balancing act between avoiding asset bubbles and maintaining growth. Banks will one day have to reckon with their vast extension of credit over the past year, some of which will inevitably sour. And, more than anything, th