(snip)Aug. 19 (Bloomberg) -- McDonald’s Corp., the world’s largest restaurant chain, became the first foreign non-financial company to sell yuan-denominated bonds in Hong Kong.
McDonald’s, based in Oak Brook, Illinois, sold 200 million yuan ($29 million) of 3 percent notes due in September 2013, sale manager Standard Chartered Plc said in an e-mailed statement today.
The sale “opens up more potential issuers to tap this market, especially those who have sizable operations in China,” said Arthur Lau, a Hong-based fixed-income fund manager at JF Asset Management Ltd.
China is expanding its financial system, and will use Hong Kong as a testing ground for yuan products, according to the city’s former central bank chief Joseph Yam. Foreign companies in February became eligible to issue yuan-denominated bonds as part of efforts to bolster the ex-British colony’s financial status and expand its role in promoting China’s currency for global commerce.
Liam Jeory, Hong Kong-based McDonald’s spokesman, said he couldn’t immediately comment. He said the company plans to issue a statement.
Bank of East Asia Ltd. and HSBC Holding Plc’s China unit sold yuan bonds in Hong Kong in 2009, becoming the first overseas banks to do so, according to data compiled by Bloomberg. Hopewell Highway Infrastructure Ltd., controlled by Hong Kong billionaire Gordon Wu, was the first non-financial company to enter the market when it issued 1.38 billion yuan of 2.98 percent notes in July, the data show.
Hopewell’s bonds were last quoted at a 2.868 percent yield, according to Hong Kong Treasury Markets Association prices.
U.S. Retailers
Wal-Mart Stores Inc., the world’s largest retailer, said in March that it may sell yuan bonds in Hong Kong. An issue would underscore the company’s commitment to support local communities and China’s financial system, Asia Chief Executive Officer Scott Price said in an interview. (snip)
Why should you care if US companies no longer go to Wall St and no longer finance their capital improvements / expansioms in US dollars ? Well, arguably, corporate bonds and their interest payments are one of the few mechanisms by which the US economy can grow in terms of 'real' value. And, arguably, the (former) use of the US dollar for such corporate financing was a major reason that US companies remained officially 'based' in the US and performed their corporate accounting in US dollars.
If McDonalds, WalMart etc. are beginning to look at their US operations as just one more component of a global business ... which this yuan bond sale implies ... this could be the beginning of a 'game changer'.



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