Dim sum bonds for CDB and Sinotruk reflect investor favouritism

Two Chinese state-owned entities China Development Bank and truckmaker Sinotruk crossed the line with bond issues late last week.

CDB priced a Rmb2.5 billion $390 million offshore renminbi bond late Thursday night, comprising the longest-dated dim sum ever sold, a Rmb1 billion 20-year bond that priced to yield 4.3% and a Rmb1.5 billion three-year bond, which priced to yield 2.95%. Sinotruk ended up paying a 4.5% yield for its Rmb1.8 billion two-year dim sum bond.

Observers pointed out that the difference in pricing between CDB and Sinotruk reflected that investors were clearly differentiating between credits, despite the fact that both are state-owned companies.

Sinotruk...