New rules may be in the works for corporate dim sum bond issuers

That Baosteel Group (Baosteel) became the first corporate to issue dim sum bonds reflects that the Chinese government is taking steps to clarify its approval process for non-banks to issue yuan-denominated debt securities.

Baosteel, a Chinese state-owned steel manufacturer, is the first Mainland Chinese corporate issuer of offshore renminbi (Rmb) bonds, having received approval from the National Development and Reform Commission (NDRC) and registering the bonds with the State Administration of Foreign Exchange (Safe). It raised Rmb3.6 billion (US$564 million).

Law firm Allen & Overy successfully guided Baosteel and helped the steel maker obtain the necessary approvals. He said that while there is a clear regulatory framework for PRC banks to issue dim sum bonds, “the approval process applicable to PRC companies is still at a pilot stage and is less clear”.