The Conrad Group

New Fund-Raising Strategy: RMB Bonds

In April 2009, the Chinese government announced a pilot program to allow Chinese companies in selected mainland regions to settle cross-border trades in Renminbi (RMB) through Hong Kong and Macau clearing banks. In July 2010, the Hong Kong Monetary Authority and the Peoples’ Bank of China allowed personal and business customers to transfer RMB within the Hong Kong financial system. RMB deposits in Hong Kong increased by 45% from September to October 2010.

Today, there are $72 billion of RMB deposits in Hong Kong, a figure that continues to grow by 10% every month. These deposits are estimated to exceed $200 billion by late 2012 and approach $600 billion by 2013. There are now billions in RMB deposits sitting in Hong Kong banks hungry for overseas investment opportunities in Real Estate, Hospitality & Leisure, Casinos, Mining, Infrastructure, and Natural Resources in regions such as: Australia, Brazil, and the rest of Latin America.

With the prime investment vehicle being the RMB-denominated Convertible Bond or Dim Sum Bond, this product will enable Chinese investors to invest in RMB-denominated debt with the ability to convert that debt into equity in a non-Chinese investment opportunity. It will also enable foreign investors to participate in opportunities denominated in a foreign currency that is expected to appreciate in the coming years. The Conrad Group is at the forefront, as a leader and innovator, in this unprecedented field.

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