Deutsche gives Taiwan a boost as a RMB hub
(14 June 2013 – Taiwan) Deutsche Bank is the first foreign-owned bank to raise renminbi (RMB) in Taiwan, boosting the country’s position as an offshore RMB hub.
Less than four months after Taiwanese banks began accepting RMB deposits, Deutsche Bank released its US$175 million (A$184 million) Bao Dao bond.
The bank believes the transaction reflects the strong demand for RMB assets in Taiwan and points to significant potential for the growth of this market.
Deutsche is confident it will be the first of many international issuers that come to Taiwan seeking RMB financing.
Deutsche printed a US$163 million three-year at 2.45 percent and a US$16 million five-year non-call one at 2.65 percent.
Both tranches were priced near the high-ends of initial indications of 1.5 percent-2.5 percent for the three-year and 1.7 percent-2.7 percent for the five-year.
The levels, however, were cheaper than those that other issuers have achieved on recent deals in the more liquid Dim Sum market.
Deutsche's success could embolden other foreign issuers to tap Taiwan for the arbitrage opportunities available from cheap RMB funding.
The ability to raise cheaper RMB from retail investors is one of the reasons that draw more foreign issuers to Taiwan and help the country become a more important centre for the currency.
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