Haitong International Securities Group has bucked the trend of Chinese brokerages using standby letters of credit (L/Cs) or some other enhancement in a US dollar bond issue.

The brokerage raised US$600 million in a 5-year offering, becoming the first Chinese brokerage to successfully market US dollar bonds on the basis of its own credit rating rather than the rating of L/C issuing bank.

BBB rating

Last October, the brokerage sold a US$900 million 5-year bond backed by a standby L/C from Bank of China Singapore.

The latest deal is guaranteed by the Hong Kong-listed entity, which has a BBB rating from Standard & Poor's.

Change of tactics

There is some comfort for investors insofar as both offerings include a keepwell agreement from Haitong International's state-backed onshore parent, Haitong Securities.

Chinese brokerages have been selling bonds in the offshore market since mid-2013, but most have been backed by standby L/Cs from Chinese banks and none have been marketed on the basis of their own rating.

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