US Dollar To RMB Exchange Rate Breaking Six RMB Exchange Rate And New High

People familiar with the matter said Country The NDRC is considering approving the offshore RMB issuance quota to eligible local state-owned enterprises in the next few weeks or months, or referring to the quota granted to 5 directly affiliated central enterprises in 2011 (25 billion yuan). The market expects local state-owned enterprises to become the new force of offshore RMB bond market.

Moodie, vice president and senior credit rating officer Zhong Wen Quan, predicts that the central government will introduce more policies and measures to reduce the obstacles to the development of the market for debt and debt, such as simplifying the procedures for collecting funds to return to the country. With the more transparent financial situation of some local governments such as Guangzhou, Moodie will consider raising the rating of state-owned enterprises subordinate to local governments.

　　 Offshore dim sum debt issuance slump

In June 26th, Treasury Department The issuance of 13 billion yuan bonds in Hongkong ranges from 3 to 10 years. Since then, in addition to the 250 million yuan of offshore RMB bonds issued by private enterprises, Xin Lian Xin fertilizer has no Chinese funded institutions or enterprises to issue dim sum bonds abroad. Since July, the offshore renminbi bond market has experienced the longest window period in history.

This contrasts sharply with the rapid recovery of Asian dollar debt after the cold spell in 7 and August. Only two days in from October 22nd to 23rd, there were up to four new US dollar bonds, of which Haitong Securities (600837, stock bar) issued 5 years' 900 million dollar credit enhancement bonds, while China Aluminum (601600, stock bar) issued 5 year dollar permanent debt, while Hengda Real Estate and China Overseas development introduced the US dollar preferred note on the same day. The former is a high-yield bond with an initial interest rate of 9%.

"From melting Endowment Considering that the appreciation of RMB against the US dollar is expected to be strengthened, real estate and other highly indebted enterprises are eager to lock in lower financing costs. Issuing bonds in the US dollar, if the RMB maintains an average annual 1%-2% appreciation rate, is equal to offset some interest costs, so the US dollar debt is more attractive than RMB Offshore bonds. Feng Xiaozhong, executive director and global banking and capital markets business director, said Hang Seng.

Dealogic data show that as of October 23rd, Chinese listed real estate enterprises listed in Hong Kong issued 42 US dollar financing tools, valued at US $15 billion 600 million, while the issuance of RMB notes was only 16 billion 400 million yuan in the same period, and the gap between them was obvious.

Excluding the cost of financing, the maturity of the bond is another factor in the success of US dollar debt. In the case of central enterprises, China Guangdong Nuclear bank, for example, issued 1 billion 500 million yuan offshore debt in January for a period of 3 years, while the US dollar debt raised at the end of September not only extended to 600 million dollars, but also extended to 5 years, and according to the Bloomberg system, the debt rate of the two bonds in the two market is currently 3.4%.

A bond market analyst at a foreign investment bank told reporters that the US dollar financing cost of high interest bonds is even slightly higher than that of RMB bonds, but the US dollar debt usually provides a longer period of 5 to 15 years. Most of the RMB bonds with the same interest rate can only be sold for 3 years. If the rating is high, state-owned enterprises value the amount of money provided by US dollar debt and consider the scale effect. The incentive to issue 3 year RMB spot debt is limited.

　　 Local state-owned enterprises break the deadlock?

In this regard, the NDRC is planning to expand the types of offshore debt issuing enterprises from state-owned enterprises directly under the ministries and commissions to state-owned enterprises under local governments.

The informed sources told reporters that compared with the central enterprises, the financing channels of local state-owned enterprises are limited. Due to the lack of experience in issuing foreign bonds, it is difficult for these enterprises to directly get involved in mature offshore dollar debt, and start from the controllable RMB dim sum debt. The NDRC believes that risk control is controllable, and it can also develop new financing channels for local governments, and it also helps to ease the tight supply of offshore RMB bonds. There is still no known list of allocation and list of enterprises, and is expected to be released soon after the announcement of the national local debt audit results.

In October 2011, the NDRC approved 5 state-owned enterprises directly under the ministries and commissions to issue RMB bonds in Hongkong, totaling 25 billion yuan, which has now run out of 17 billion yuan. Due to ample financing channels, including Huaneng, Datang and China Minmetals all have considerable debt issuance limits, they have limited interest in offshore markets.

According to market participants, the cost of issuing offshore RMB bonds is about 50 basis points lower than that in the offshore market. Under the trend of tight neutral liquidity in domestic bond markets, offshore bond markets such as Hongkong are not attractive to local state-owned enterprises.

The solvency and credit quality of local state-owned enterprises are directly linked to local governments. But at present, the information disclosed by the local government is limited, it is difficult to assess the ability and willingness of the local state-owned enterprises to give special support when they are in financial difficulties, "Zhong Wen Quan said." but in the past 18 months, China has introduced a unified debt management system, and local governments such as Guangzhou have taken the lead to improve the quality of the letter. Moodie may consider raising the local state-owned enterprises' ratings.

As of October 7th, Moodie's participation in the rating of local state-owned enterprises including Beijing Holdings (Baa1), Guangming Food (Baa3), Shanghai industrial city development group (B1), Ba3, and so on.