Dim Sum Bonds: The Offshore Renminbi (RMB)-Denominated Bonds

CHAPTER 5

Investment Banks and the Dim Sum Bond Issuing Process

Investment banks are one of the major players in the offshore renminbi (RMB) bond market. They act as go-betweeners, liaising between issuers and investors. They help to close deals by coordinating all processes related to the bond issues. As it happens in other capital markets, the demand and wishes of both issuers and investors are to be negotiated and agreed by both parties with the help of the mediator: investment banks.1 This chapter aims at providing a distinct perspective to prospective issuers and investors with regard to the bond issuing process in the dim sum bond market.

5.1 DIM SUM BOND ISSUING PROCESS

In this chapter, we present the issuing process in the offshore RMB market in general and the dim sum bond origination process in particular. We first discuss the rationale for issuing dim sum bonds from the issuer perspective and investing in dim sum bonds from investor perspective. By way of discussing the steps of the bond origination process in detail, we highlight the peculiar characteristics in the dim sum bond market as compared to the traditional investment banking process such as that of the USD bond market in the region of Asia-Pacific ex Japan and Australasia.

5.1.1 Rationale for Dim Sum Bonds: Issuer and Investor Perspectives

The bond origination process begins with the matching of bond issuers and investors through the help of investment banks, which act as global coordinators, bookrunners, ...