Caterpillar to Issue Renminbi-Denominated Debt
Heavy equipment manufacturer Caterpillar is marketing a two-year 1 billion renminbi ($150 million) bond to institutional investors in Hong Kong, the Financial Times reported. That significantly exceeds the first multinational entry into the market, a three-year 200 million renminbi ($30 million) issue launched by McDonald's (MCD) in August. McDonald's note was quickly oversubscribed and secured a 3% coupon.
China's government also announced it would initiate a second sale of renminbi-denominated bonds in Hong Kong with the aim of deepening the offshore market for renminbi-denominated debt. "Beijing has liberalized the use of the renminbi in Hong Kong," the Financial Times says, "as part of a much bigger plan to boost the international role of the currency and reduce China's reliance on the U.S. dollar."