Dim sum and Hong Kong dollar bond issuances surge

Issuance of Hong Kong dollar and offshore yuan bonds, known as ‘dim sum bonds’, has seen significant growth as issuers seek lower borrowing costs compared to US dollar-denominated debt. In the first half of the year, Hong Kong dollar bond issuance rose 84.4% year-on-year to HK$583.67 billion, while dim sum bond issuance increased 69.1% to 547.25 billion yuan, reaching a semi-annual high.

David Yim Sau-king, head of debt capital markets for Greater China and North Asia at Standard Chartered Bank, noted that the trend is driven by high US interest rates and the increasing participation of mainland Chinese non-bank financial institutions, such as insurance companies and funds, in the offshore market. This follows the expansion of the Bond Connect program, which allowed these institutions to invest in offshore bonds.

As issuers shift toward local currency bonds to replace maturing US dollar debt, the growth in G3 currency bond issuance (excluding Japan) has slowed. While dim sum bonds have seen a surge, the issuance of ‘wonton bonds’—Hong Kong dollar bonds issued by overseas institutions—has also grown significantly, exceeding last year's total in the first half of this year.