UPS says it's first foreign non-bank to issue commercial paper in renminbi

AMERICAN package delivery giant UPS has executed a commercial paper transaction denominated in the offshore renminbi currency, creating a new financial vehicle to fund growth projects in China, according to its press release.

The issuance, known as a CNH (Chinese Offshore Yuan)-denominated commercial paper transaction, totalled CNH630 million and is the first by a foreign company outside the financial sector to be executed here.

"The offshore deliverable renminbi market has experienced rapid development since China started promoting the use of its currency in international transactions," said Andy Dolny, UPS's treasurer and chief investor relations officer. "Companies like UPS can leverage this liquid short-dated CNH money market as an alternative means of funding investments in China."

"This CNH initiative will give UPS more flexibility in payment, collection and future investments in China, ultimately enabling our clients' businesses to respond more effectively to expanding trade lanes with international markets," added UPS Asia Pacific regional president Brendan Canavan.

China is UPS' largest growth market and the company has been investing significantly in its technology and logistics infrastructure there since 2002. To date, more than US$1 billion has been invested in the market, including two major air hubs in Shanghai and Shenzhen that support trade flows within Asia and with other international markets. UPS now serves more than 330 cities in China.