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

Jane Hemming, Reading, UK

When buying a villa in Spain, The Money Cloud saved us over £5,000 in comparison to the quote from our bank.

Fiona Aitkin

I've found your comparisons really useful and frequently refresh the page as we're about to pay a deposit on a house in Turkey. Pretty good.
uae

International Money Transfers for Individuals

If you are purchasing overseas property, paying tuition fees, receiving your pensions or for whatever reason, transferring money internationally can be a costly. We compare the services on offer for the amount you wish to send and save you money by finding the best exchange rates and lowest fees.

Purchasing overseas property - satisfying your currency needs for payment

EMIGRATING - TRANSFERRING YOUR ASSETS OVERSEAS

Moving overseas can be daunting, with many unexpected aspects to your move you might not have considered. We cover all the financial basics of moving abroad, from the expenses to consider to the most cost-efficient ways to transfer your bank accounts and financial assets to your new home.

Market Insights

Sign up for our newsletter.

Thank You for subscribing to our Newsletter

You have successfully signed up to our Newsletter