More global firms eye Hong Kong for cheaper yuan loans, bonds: StanChart More companies are using Hong Kong as a platform to tap yuan funds to finance their operations, thanks to the city’s active capital market and a new 200 billion yuan (US$28.68 billion) liquidity facility that provides steady, cheap yuan funding, according to a Standard Chartered report on Wednesday. Among companies that have yuan exposure, about 24 per cent said they would like to increase yuan financing over the next three years, according to Standard Chartered, citing the results of a survey of 300 global firms across 19 sectors. Hong Kong has almost 1 trillion yuan of bank deposits, while lenders can also tap cheap and stable yuan funds from the Hong Kong Monetary Authority’s (HKMA) RMB Business Facility. Launched in February last year, the facility initially had a 100 billion yuan quota for 40 banks, including Standard Chartered, to arrange yuan loans for their clients. The facility was so popular that the People’s Bank of China supported the HKMA in doubling the amount to 200 billion yuan starting in February this year. “We are seeing an increasing number of international companies extensively using yuan in areas such as cross-border trade, procurement and supply chains,” said Karen Ng, head of China opening and RMB Internationalisation at Standard Chartered. “Hong Kong has also introduced a range of measures to enhance offshore yuan liquidity and facilitate trade financing,” she said. Standard Chartered has used the facility to provide short-term yuan loans to companies in Hong Kong and Singapore, with interest rates charged at the Shanghai three-month interbank offered rate (SHIBOR), which is 200 basis points lower than the US fed rate. “Besides a lower interest rate, global companies are interested in issuing yuan bonds or borrowing yuan due to geopolitical tensions,” said Tom Chan Pak-lam, honorary president of the Institute of Securities Dealers. The US-Israel war on Iran has led investors to “cut their reliance on US dollar assets”, which would encourage more companies to issue dim sum bonds in Hong Kong, which in turn would “support the city’s role as a large offshore yuan centre”, he added. Standard Chartered also said Hong Kong’s active capital market had allowed many companies to raise yuan-denominated bonds, also called dim sum bonds, while companies could trade mainland bonds via the Bond Connect scheme. Chinese e-commerce major JD.com last week priced a 10 billion yuan (HK$11.4 billion) dual-tranche offshore bond offering in Hong Kong. Dim sum bond issuance had surged in recent years, from about 300 billion yuan in 2021 to 850 billion yuan in 2024, and was expected to reach between 900 billion yuan and 1 trillion yuan in 2025, according to a December report by Deutsche Bank. “Leveraging the advantages of the 15th five-year plan and its role as a ‘superconnector’, Hong Kong is further consolidating its position as the world’s largest offshore yuan business centre and advancing the internationalisation of the yuan,” Ng said. The Standard Chartered survey found that 25 per cent of the companies had some yuan exposure, but only 14 per cent of their debt was denominated in yuan, highlighting a gap between operating exposure and their financing currency. https://www.scmp.com/business/banking-finance/article/3349396/more-global-firms-eye-hong-kong-cheaper-yuan-loans-bonds-stanchart?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post