Allen & Overy and Linklaters have advised on British supermarket chain operator Tesco’s RMB 725 billion dim sum bond issuance.

The proceeds of the issuance will be used to fund the retailer’s China operations. The coupons will mature in three years and carry a semi-annual coupon rate of 1.75 percent. The issue’s proceeds will be used to drive the company’s China operations. Allen & Overy was retained by Tesco, while Linklaters has advised the issue’s joint lead managers, HSBC and Standard Chartered.

The yuan-denominated bonds are one of the few offshore dim sum bonds listed at the Hong Kong Stock Exchange.

Unlike many yuan bonds that do not carry any credit rating due to high demand from investors betting on the continued appreciation of yuan and the scarcity of RMB-denominated investment products available in the market, Tesco’s dim sum bonds carry added market approval—they were rated A- by Standard & Poor's.

Allen & Overy partner Walter Hyuk-Soo Son, who led the firm’s team on the transaction, said: “As renminbi products become more visible to investors, we expect to see more multinational corporates coming to this part of the world for renminbi capital raising."   

Allen & Overy’s team is comprised of Son; Andrew Harrow, the firm’s head of international capital markets Asia; Beijing-based regulatory partner Jane Jiang and associate Jaclyn Yeap.

Allen & Overy has advised on a number of offshore yuan bond transactions in the past. They include offerings from the Asian Development Bank, Caterpillar, China Resources Power, Unilever and BP.