Record year beckons for dim sum bonds
Rate differentials and policy plumbing are pulling in new issuers, says Standard Chartered
[The content of this article has been produced by our advertising partner.]
“Dim sum” bonds, offshore renminbi debt issued mostly in Hong Kong, are headed for a record year.
Offshore issuance has already reached about Rmb475bn in 2025 to end-August, propelled by cheaper onshore rates and a broader base of issuers and buyers, according to Bloomberg data.
Against that backdrop, Standard Chartered is positioning itself as an arranger of choice for cross-border RMB funding, with Hong Kong as the hub.
Diversification is emerging as a key theme for issuers accessing the local currency market, alongside rate considerations, says Keith Cheung, the bank’s head of debt syndicate for Greater China and North Asia.
“Dollar yields remain relatively high even with cuts being priced; RMB coupons look attractive by comparison for many issuers,” he explains.
The mismatch in funding costs, he argues, is nudging treasurers to explore CNH tranches alongside dollars and euros.
And this year’s deal flow suggests the market is no longer confined to Chinese and Hong Kong issuers, as a wider mix of international names enter the CNH space.
International corporates, from insurers to fast-moving consumer goods firms, have tapped the offshore Renminbi market, while Chinese state-linked names still anchor supply.
Cheung says the slate now includes global names as well as mainland policy and municipal borrowers, with non-Chinese issuers increasingly drawn to the opportunity to diversify their investor base.
One recent deal exemplifies Standard Chartered’s role.
In August, the bank acted as joint global coordinator and bookrunner on Chubb INA’s three-tranche, Rmb4.5bn CNH issue, which included a 30-year corporate dim sum tranche, a first for an international insurance company in the market.
Cheung says such deals reflect growing appetite for longer-dated CNH paper among Asian real-money and insurance investors, even as the broader dim sum market continues to skew towards shorter tenors.
Mainland municipal issuance has also become a recurring feature. Shenzhen has returned with multiple offshore rounds after blazing the trail in 2021; recent deals have been framed as part of the Hong Kong-Shenzhen financial integration push.
On the bid side, Cheung describes a market that blends international funds, regional insurers and a growing number of mainland investors accessing Hong Kong through Southbound channels.
“We’re clearly seeing more mainland participation in offshore RMB bonds via Southbound Bond Connect, alongside the traditional global real-money buyers,” he says.
He adds that for bonds specifically, Southbound has become more active than quota-based QDII, which is used across multiple asset classes.
Cheung also notes that RMB demand now extends to CNH bonds issued by foreign companies.
“We’ve handled international issuers where there were Middle East renminbi buyers in the book,” he says, citing confidentiality constraints on accounts.
Recent policy updates have helped improve market liquidity and infrastructure, supporting both transaction volume and more transparent price discovery in the offshore RMB space.
In January, the HKMA and PBoC announced a framework allowing Northbound Bond Connect holdings to be pledged for offshore RMB repo in Hong Kong, improving liquidity management for CNH investors and dealers.
The arrangement went live in February, enabling both electronic and voice‑traded repo. Meanwhile, enhancements to the Southbound Bond Connect channel were introduced to broaden access and liquidity.
As of July 8, the investor universe for Southbound Bond Connect had been expanded beyond banks to include securities firms, fund managers, insurers and wealth management companies, widening the pool of mainland investors entering the offshore bond market
Meanwhile, reforms to offshore repo mechanics now allow re‑hypothecation of bond collateral during the repo period and support cross‑currency settlement in currencies including HKD, USD, and EUR, all of which are enhancements set to go live in late August.
Broadening issuer base and deal structures
For international issuers, the calculus is increasingly pragmatic.
Cheung says many issuers are “diversifying funding sources and investor reach”, noting that Nestlé, PSA, and Chubb have all made their debut CNH issuances this year.
He argues that this is a sign that first-time international names are increasingly embracing the offshore renminbi market. Baidu has also made its first CNH bond offering, which represented a notable move by a Chinese TMT private-sector issuer into the dim sum space.
For sovereign, supranational and agency borrowers, CNH can complement dollar curves and support Asia-focused distribution. Among Chinese issuers, policy institutions, local governments, and both private-owned and state-owned enterprises continue to print, often with green or social labels.
The relative-value case shows up not only in coupons, but in use-of-proceeds flexibility. In the Chubb deal, for example, proceeds included general corporate purposes and refinancing – a typical structure for global corporates balancing currency and tenor across liabilities.
New liquidity tools and network funding
Following the launch of the HKMA’s RMB Trade Financing Liquidity Facility earlier this year, Standard Chartered became one of the first banks to tap the new channel that allows participating institutions to borrow RMB at onshore-linked rates to support offshore trade loans.
This gives the bank access to a stable, potentially lower-cost source of RMB funding for corporates seeking competitive pricing to support cross-border activity, especially in Belt and Road-linked corridors.
“Clients are increasingly interested in tapping RMB facilities; not just those with transactional RMB flows, but also those seeking to benefit from the rate differential versus USD,” said Karen Ng, Head of China Opening and RMB Internationalisation.
“Through our Hong Kong hub – Standard Chartered’s largest offshore RMB liquidity centre – we’ve been able to support a range of offshore RMB financing solutions, including both trade finance and long-term loans, across various regions such as ASEAN and Africa, covering markets like Singapore, Malaysia, Mauritius, Tanzania and Uganda.”
“This network-based funding channel is independent of the HKMA’s Trade Financing Liquidity Facility,” Ng explained, adding that this funding framework not only strengthens the bank’s flexibility in responding to demand for offshore RMB trade finance but also Hong Kong’s role as a global liquidity and distribution platform for RMB-denominated instruments.
Tokenisation and next-stage infrastructure
Cheung is excited about the near-term potential for tokenisation to integrate with mainstream bond markets and expects connectivity to emerge within two to three years as digital infrastructure matures.
For now, tokenised bonds already speed up post-trade settlement, reducing timelines from T+5 to around T+1, as blockchain streamlines the back end.
Standard Chartered is piloting tokenisation through its ventures arm, including initiatives within the HKMA sandbox, while continuing to expand RMB corridors and support outbound clients across Belt and Road markets.
With dim sum bond issuance on track for a record, the question is whether momentum can carry into year-end.
The rate differential remains supportive, with dim sum coupons still below equivalent dollar funding costs for many high-grade names. Meanwhile, policy measures – from offshore repo eligibility to increased official CNH issuance – continue to lift liquidity and price formation.
“What matters is having different types of issuers, not just Chinese financials, and a stable mix of buyers. We’re seeing both trends strengthen,” says Cheung.
“We’re also in dialogue with names from Indonesia and the Middle East; Central Asian borrowers have shown dim sum is viable with the right investor education.”
As the Belt and Road Summit returns to the HKCEC on September 10-11, co-organised by the HKSAR Government and HKTDC, its deal-making platform will pair participants in curated one-to-one meetings with online follow-ups.
With Standard Chartered among the sponsors, the event offers a timely platform for Hong Kong to draw more non-Chinese issuers and fresh RMB buyers, keeping dim sum issuance on track for a record year.