The Anglo-Dutch consumer goods firm Unilever has raised $46 million through the issue of three-year bonds in Hong Kong, a mere drop in the vast global bond pool. However, this deal is significant because the bond is denominated in renminbi, the Chinese currency that Beijing is trying to internationalize.
Unilever has now joined the likes of US companies McDonalds and Caterpillar to issue such renminbi bonds. The bond markets have already zeroed in on a smart moniker for these assets—dim sum bonds. Like the real dim sums, the bonds issued in Hong Kong may be bite-sized, but they are adding up well. More than $1.2 billion of dim sum bonds have been sold in the first quarter of 2011.
Most analysts say companies are issuing dim sums to impress the Chinese government. Yet, India needs to get into the game soon, by developing an onshore and offshore market for Indian corporate bonds.