Baosteel and Mitsui beat the dim sum bond crowd

In the past, investors have mainly bought dim sum bonds for the prospects of renminbi appreciation and hence demand for short tenors has typically been the strongest. But the dim sum bonds from Japanese trading firm Mitsui Co and Chinese steelmaker Baosteel reflect a growing investor appetite for the five-year tenor.

Mitsui yesterday evening priced a Rmb500 million $79 million five-year dim sum, or offshore renminbi bond, at a coupon of 4.25%, at the tight end of the 4.25% to 4.5% guidance. The deal attracted more than Rmb2.25 billion of orders from 65 accounts. There was strong participation from fund managers, which were allocated 68%. Private banks took 14%, banks...