Chinese Yuan

Massive Increase In Chinese Companies Fundraising Overseas

Chinese companies have raised $52.6 billion US dollars via bond issues in the first quarter of 2017 – a 72% increase from the previous quarter, and five times more than Q1 2016, according to Dealogic data, Netral News reports.

The reason? The Chinese government are making it harder and harder for Chinese firms to move money overseas, a switch in policy that is designed to protect “overheated” sectors such as real estate. As overseas fundraising is rising, domestic debt issuances have fallen 64% year on year, to $91 billion.

Since companies can no longer move their Yuan overseas, many have adopted a strategy of raising money in the US dollar markets, to fund acquisitions, find financing, lend to smaller investors or even use to cover bonds that are falling due.

This has led to concerns that risky issuances are being priced with yields that are too low – since the demand for these bonds – particularly from Chinese investors that have stashed money overseas – is high.

Companies that have issued debt – even whilst their domestic reserves are at high levels, include Evergrande, who priced three dollar bonds in Hong Kong within the space of a week for a total of $2.5 billion, Lenovo, who have raised $500m of bonds with a 3.875% coupon and $1bn of 5.375% perpetual with no maturity dates.

In 2014, Lenovo issued a promissory note for $2.91 billion to Google to pay for its acquisition of Motorola Mobility Holdings, and it is thought that the recent bond issues will help the company meet its obligations to Google.

Comparison tool

Sending Currency
Buying Currency
Send USD Receive

Latest Articles

Andy Ferguson

Format is very organized and incredibly informative. All the information is right there and it is all pertinent to what I need to know. Great work.

Pryjin Prakash

I was looking to compare alternatives to get the best exchange rate - You provided exactly what I was looking for.
Portugal property

MAKING OVERSEAS PAYMENTS FOR BUYING PROPERTY IN PORTUGAL

When purchasing property in Portugal, we explain all the steps involved in the purchase. We can demonstrate how to make the most of your money when making the international payments to cover the purchase price and associated costs and how to avoid exchange rate risks.

Paying overseas suppliers in their own foreign currency

PAYING OVERSEAS SUPPLIERS FOR GOODS AND SERVICES

When paying overseas suppliers on a regular basis, currency conversion costs as well as fees when using your bank all add up. The Money Cloud saves you money by introducing you to specialist foreign exchange companies when conducting overseas business purchases and expenses.

Market Insights

Sign up for our newsletter.

Thank You for subscribing to our Newsletter

You have successfully signed up to our Newsletter