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Hong Kong Defies Doomsayers With Splash in Offshore Yuan Debt

  • Dim Sum note sales rise to highest since 2014 so far this year
  • Southbound Bond Connect, rising dollar yields to spur issues
People cross a road at a traffic light during lunch hour in the Central district of Hong Kong, China.

People cross a road at a traffic light during lunch hour in the Central district of Hong Kong, China.

Photographer: Paul Yeung/Bloomberg

Predictions of a decline in Hong Kong as a financial hub look premature, at least as far as offshore yuan debt deals are concerned.

Issuance in Hong Kong of corporate debt denominated in the offshore Chinese yuan has surged 45% to $21.7 billion so far this year, the most for the period since 2014, Bloomberg-compiled data show. Sales of so-called Dim Sum bonds have jumped as yuan borrowing costs are more attractive for issuers than US dollar rates, while for investors the notes often offer better yields than Mainland yuan debt.