August 31, 2016 / 12:52 PM / 2 years ago

Cabei returns to Formosa market with short-dated bond

NEW YORK, Aug 31 (IFR) - The Central American Bank for Economic Integration (Cabei) returned to the Taiwanese market this week, raising Rmb700m (US$104.6m) through a three-year bond.

The deal, which priced at par to yield 3.95% through Standard Chartered, marked Cabei’s second trade in the Formosa market this year following a US$185m bond in April.

While Cabei has issued renminbi-denominated debt in the Formosa market before, it opted for dollars earlier this year as investors favored the greenback over the weakening Chinese currency.

But that could be changing, said Ricardo Rico, head of capital markets at the Honduras-based bank.

“Strong participation [on this deal] might indicate accounts are beginning to look at the renminbi again,” he told IFR.

The deal saw demand reach of around Rmb2.1bn, with the short tenor mostly luring private banks and asset managers from Taiwan as well as Hong Kong.

The bank’s three prior trades in the Formosa market largely had longer-dated maturities that attracted institutional accounts such as insurance companies.

Cabei’s Formosa trade follows the bank’s first-ever Green bond earlier in August. That four-year issue was denominated in South African rand and targeted Japanese accounts in the retail Uridashi market.

The bank is expected to return to the bond markets again this year to cover the remainder of its funding needs for 2016.

“We still have room to do a few more trades, as we still need to raise close to US$300m (this year),” said Rico. (Reporting by Paul Kilby; Editing by Marc Carnegie)

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