Hong Kong –Evergrande Real Estate Group, a real estate developer in China, announced on Friday that the Company had raised capital of 9.25 billion yuan (USD 1.4 billion) through the issuance of notes valued at RMB in international market; previously, the Company set the nominal interest rate of 3-year notes at 7.50%, and the nominal interest rate of 5-year notes at 9.25%.

This is an issuance of notes valued at RMB and settled at USD (synthetic RMB bonds) for the third time in the past one month, also with the largest scale, showing the increasing attraction of emerging RMB offshore bond market. The market enables the foreign investors who cannot enter into the strictly monitored RMB market of China to profit from the appreciation of the RMB.

This kind of internationally issued domestic currency bonds such as the notes of Eevergrande is also known as synthetic off shore bonds. This kind of bonds is valued at domestic currency, and issued globally, but is settled at USD according to the market exchange rate in the transaction. This kind of bonds is very attractive for the enterprises at home and abroad with RMB earnings or RMB financing needs. Therefore, the market demand is powerful, and the borrowing cost is reduced.

On Friday, one person in the know said that the issuance of notes of Evergrande had attracted 244 investors to subscribe, with the total amount of 33.1 billion yuan, indicating that the notes had obtained the subscription of 3.6 times.