Dim Sum

Dim Sum Bonds - bonds issued in Hong Kong and denominated in Chinese yuan renminbi (CNY).

Characteristics:
• Bond issuers can be both companies from mainland China and foreign companies;
• The bonds are issued in the national currency of China;
• Lack of strict control and complexity of the issue procedure which is specific for Panda Bonds;
• A large number of foreign investors in the market;
• On average, the circulation period for Dim Sum Bonds is from 2 to 5 years, the volume of issues is CNY 0.5–5 billion.

Advantages:
• The ability to acquire debt financing to finance operating expenses related to the use of the national currency of China;
• Relatively simple issue procedure, no control from Chinese regulatory authorities;
• High liquidity of the secondary market.

Disadvantages:
• Restrictions on the introduction of the attracted funds to the mainland Chinese market.

Issuers of Dim Sum Bonds can be political banks in China (for example, Agricultural Development Bank of China (ADBC)), companies registered in China (Bank of Communications, China Eastern Airlines), as well as foreign companies (McDonalds, Unilever N. V.).

Dim Sum Bonds are issued by companies to raise funds in yuan; at the same time, unlike the mainland Chinese market, the Hong Kong market has a large number of foreign investors.