What Are Dim Sum Bonds?

What Are Dim Sum Bonds?

Recently I posted a blog about “Dim Sum Bonds”

http://davidnealis.blogspot.com/2011/12/baosteel-issues-largest-corporate-dim.html

And I have had some reader feed back asking for more details on Dim Sum Bonds, so I am posting the definition from Investopedia with a link to their website for anyone who would like more information.

   

A business associate of mine, Alan Rohrbach and I were recently talking about Dim Sum Bonds and we jokingly came to the conclusion that Dim Sum Bonds are a sophisticated but light Hong Kong wrapping of an often delicious Mainland Chinese filling. Time will tell if this new delicacy continues to attract the palate of investors.

Definition of 'Dim Sum Bond'

A bond denominated in Chinese yuan and issued in Hong Kong. Dim sum bonds are attractive to foreign investors who desire exposure to yuan-denominated assets, but are restricted by China's capital controls from investing in domestic Chinese debt. The issuers of dim sum bonds are largely entities based in China or Hong Kong, and occasionally foreign companies. The term is derived from the Chinese cuisine that involves serving a variety of small delicacies and is especially popular in Hong Kong.

Investopedia explains 'Dim Sum Bond'

The dim sum bond market is still in its infancy but is expected to grow rapidly over time. As of October 2010, only $1.46 billion of dim sum bonds had been issued for the year, amounting to about 1% of $145 billion of yuan-denominated debt issued in mainland China.

http://www.investopedia.com/terms/d/dim-sum-bond.asp#ixzz1ggO2kq6A