Shinhan Bank sells $95m of yuan-denominated bonds

HONG KONG (Yonhap News) ― Shinhan Bank, South Korea’s third-largest commercial bank, said Wednesday it has raised 600 million yuan ($95 million) in so-called dimsum bonds to diversify funding sources amid the prolonged global downturn.

The yuan-denominated bonds were priced to yield 3.5 percent and will mature in two years, the lender said.

Dimsum bonds refer to bonds that are denominated in the yuan and issued in Hong Kong.

The latest debt sale comes amid its efforts to diversify funding sources, the lender said, without elaborating on the use of the proceeds from the debt sale.

Earlier in March, Shinhan Bank also sold debts worth 625 million yuan in the Hong Kong bond market.

The number of South Korean companies raising funds by selling the yuan-denominated bonds in Hong Kong has been on the increase starting last year. 

In July last year, CJ Cheiljedang Corp., South Korea’s leading food manufacturer, raised 1.1 billion yuan, becoming the first South Korean firm to sell dimsum bonds.

Korea Development Bank, the Export-Import Bank of Korea, Hyundai Capital Services Inc. and Lotte Shopping Co. also have raised funds by selling dimsum bonds this year.

The Chinese monetary authorities allowed foreign companies in 2010 to issue dimsum bonds to boost the global use of the yuan.