Two recently closed Singapore-listed bond issues mark a dramatic change in the international debt market out of China, according to Herbert Smith.

Hong Kong-based partner Terence Grady has led the UK firm's respective teams advising Industrial and Commercial Bank of China Asia and Panva Gas Holdings Limited on the issues.

Firstly, ICBC Asia sought to raise US$300m through a Singapore-listed bond issue lead managed by Goldman Sachs, HSBC and JP Morgan. The issue was oversubscribed to the tune of US$1.5bn, leading ICBC Asia to increase the issue to US$400m guaranteed notes due 2009.

Working with Grady on the first senior fixed-rate bond by a Hong Kong incorporated bank was Derek Leung, Dee Dee Man and Margie China (banking) and partner Tommy Tong, Carolyn Sng and Michael Ling (corporate). Allen & Overy advised the joint lead managers.

Secondly, in the high yield bond market, Panva Gas Holdings Limited sought to raise US$150m again through a Singapore-listed bond issue jointly arranged by Morgan Stanley and Merrill Lynch. This issue was also oversubscribed to the tune of US$1.5bn, leading Panva to increase the issue to US$200m medium-term notes due 2011.

Working with Grady on the Panva Gas deal were Kevin Roy, Margie Chan and Anny Leung. The managers were advised by Freshfields Bruckhaus Deringer.

Grady said the growing use of non-investment grade bonds was a further sign of the increasing sophistication and confidence of Chinese borrowers. "These significant transactions confirm the Chinese market will continue to act as an engine for both local and international growth," he said. "Coupled with the forthcoming listings of a number of Chinese banks on international stock markets, we are now witnessing the 'internationalisation' of the entire China banking system."