China’s state-owned enterprises (SOEs) may use international debt markets to double their bond issues to US$8 billion by 2011, according to a report by UBS, Bloomberg reported. The move comes as China’s banks are about to reach their lending quotas for the year and may have to stop extending new loans. China’s state firms have been taking advantage of a weak dollar and an anticipated appreciation of the renminbi to expand their holdings abroad. Low rates on US Treasuries have also incentivized SOEs to access funding from dollar-denominated debt issues. Analysts identified CNOOC, China Petroleum & Chemical Corporation (SNP.NYSE, 600028.SH, 0386.HK) and China Cosco Holdings (601989.SH, 1919.HK) as potential issuers of dollar bonds in the future. Non-bank SOEs have so far raised US$3.6 billion from the dollar debt market in 2010.
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