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Veolia Environnement priced its debut Panda bond on September 1, becoming the first French issuer to tap the onshore Chinese market. The firm was also one of the first corporates to be allowed to repatriate funds out of China despite ongoing capital controls, its treasurer told GlobalRMB.
The transaction comes at a time when there has been a steady flow of Panda bonds, although primarily from Red chips - firms whose business is primarily in China but headquartered elsewhere. Veolia is in an entirely different category as one of only three foreign corporate issuers to tap the market following Germany's Daimler and Singapore's Global Logistic Properties.
The Paris-headquartered resource management multinational is no stranger to renminbi bond markets.
"In 2012 we issued a dim sum bond which will mature next year," said Antoine Nguyen, head of corporate financing and market operations, Veolia, in a phone interview. "In the future, one of the options to refinance it will be a Panda bond."
The firm, which operates in some 40 cities within China, had a number of reasons to look at the market, according to Claire Bechaux, group treasurer.
"We try to source our funding directly in the currency of the markets where we operate," she said. "And China is one of the most important countries for us in terms of capital investment. We have also been following closely the internationalisation of the RMB."
China's emphasis on broader use of the RMB and its opening of the onshore bond market to both issuers and investors has paid off so far. Issuance in the Panda bond market has been strong, with a total of 26 deals in 2016 so far, compared with the seven deals priced...