The Ministry of Finance announced on Wednesday that it plans to issue 15 billion yuan (US$2.2 billion) worth of sovereign bonds in Hong Kong next week, marking its third issuance this year and strengthening the city’s role as the world’s largest offshore yuan trading hub.
Analysts expected the issuance to be popular because the yuan had been appreciating against other currencies and many international investors were seeking to diversify their portfolios amid geopolitical tensions.
The bonds, with two-year, three-year, five-year, and 10-year tenures, will be open for public tender on June 16 via the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA), according to a ministry statement on its website.
The two-year bonds have a coupon rate of 1.38 per cent per year, with the three-year bonds set at 1.4 per cent, five-year bonds at 1.57 per cent, and 10-year bonds at 1.87 per cent.
The ministry raised 4.5 billion yuan for each of the two-year and three-year tranches, 3.5 billion yuan for the five-year tranche and 2.5 billion yuan for the 10-year bonds, according to HKMA data.
China’s market regulators have urged Hong Kong banks to engage more deeply in offshore market development, said Sun Yu, chairman of the Hong Kong Association of Banks, at a press conference in Beijing on Tuesday. He made the remarks following a meeting on Monday in the capital between a Hong Kong banking delegation and senior national financial officers.
