SHENZHEN: SF Holding Co, China’s largest express delivery firm, plans to raise as much as 10 billion yuan through its first-ever offshore yuan bond offering, joining a growing wave of issuers tapping the dim sum debt market.
The Hong Kong and Shenzhen-listed logistics giant, founded by billionaire Wang Wei, has mandated banks for the sale of three-year and/or five-year bonds, depending on market conditions, according to people familiar with the matter.
Discussions are still ongoing and details may change, the people added.
The potential transaction comes as issuers flock to the offshore yuan bond market for cheaper funding.
Record issuance this year has been fuelled not only by relatively low yuan borrowing costs, but also by policy support from Beijing, including an expansion of the channel to let more mainland capital into the offshore debt market.
The result is a deeper pool of demand that is drawing both first-time and returning issuers to the dim sum bond market.
SF didn’t immediately respond to a request for comment.
Sovereign and corporate borrowers have sold a combined 863 billion yuan of dim sum bonds so far this year, a 35% increase from the same period a year earlier, marking a record high for the period, according to data compiled by Bloomberg.
Recent Chinese private-sector issuers include hotel firm H World Group Ltd, which earlier this month raised 3.35 billion yuan from its first dim sum bond offering.
Investment grade-rated SF had previously relied on the US dollar market for conventional offshore bond financing, according to Bloomberg-compiled data.
A successful deal would mark the company’s return to the offshore bond market after nearly five years.
The company currently has an US$800mil dollar bond coming due in November.
SF is a massive Chinese multinational company with a market capitalisation of approximately US$24.4bil. — Bloomberg
