Octus on Credit: Playing the Game – Diversity Financings vs. Cost

Despite access to cheaper onshore funding, Chinese issuers—including developers, industrial firms, and local government financing vehicles (LGFVs)—remain keen to tap the offshore market, even at significantly higher costs. 

Seazen Group told investors during non-deal roadshows this month that it is considering a new USD bond issue to refinance its $300 million notes due Oct. 15. Other recent offshore issuers include state-backed Greentown China Holdings, Hong Kong-listed aluminium producer China Hongqiao Group, and Singapore-based logistics real estate firm GLP Pte, with yields of 8.45%, 6.925%, and 9.75%, respectively.

Issuers are prioritizing offshore issuance to maintain international visibility and preserve access to USD markets—access that, once lost, can be difficult to regain. 

This trend extends to LGFVs, which typically pay about 3% onshore but accept 5–6% offshore yields. The higher cost is often justified by refinancing pressure on existing USD debt and stricter domestic rules on new RMB borrowings.