China’s finance ministry successfully issued 4 billion euro-denominated sovereign bonds, more than four times oversubscribed

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BEIJING, November 11, 2021 / PRNewswire / – from China Ministry of Finance (“MoF”) issued 4 billion euros– sovereign bonds denominated in tranches of 3, 7 and 12 years in the Hong Kong Special Administrative Region. This is the third consecutive annual issue since the country restarted the issuance of sovereign Eurobonds in 2019. On pricing day, three tranches were announced with an initial MS + zone price orientation. 20bps, MS area + 40bps and MS area + 65bps. , attracting multiple orders from many leading international bond investors, hitting an oversubscription limit of 4.3 times with the final order book above 17.2 billion euros. The final price of the 3-year tranche has been tightened to MS + 0bps; the 7-year tranche was tightened to MS + 20bps; and the 12-year bracket was tightened to MS + 52bps. The 3-year tranche again posted a negative yield and the issue spread fell to 0bp for the first time. CICC acts as Lead Partner and Associate Bookrunner.

Wang sheng, member of the management committee and head of investment banking at CICC, said that “the issue is about to set a price benchmark for euro financing of Chinese companies abroad, diversify options investors to invest in from China economy and further strengthens the links and cooperation between China and European markets. “

At October 19, MoF issued $ 4 billion– sovereign bonds denominated in Hong Kong, reaching a record level of issue spreads on all tranches of USD sovereign bonds in China. The issue spread for the 3-year tranche fell below 10bp for the first time and the yield approached that of US Treasuries of the same maturity. After issuance, the performance of the secondary market remained strong. At October 11 and 12, the Shenzhen city ​​government and Guangdong the provincial government issued offshore RMB local government bonds of 5 billion yuan and 2.2 billion yuan in Hong Kong and Macau respectively, achieving a zero-to-one breakthrough in offshore bond issuance by local governments on the continent China.

“The CICC has subscribed to several issues of China sovereign bonds and local government bonds in different currencies this year ”, Wang sheng noted. “They have remained very attractive to international investors and the successful issues have shown confidence from China prospects for growth and sustainability. Without a doubt, openness and connections to global financial markets create a win-win situation. “

In recent years, with the acceleration of the departures of Chinese companies abroad, China remains active in the offshore bond markets. Faced with the trade-off between stabilizing the economic recovery and containing inflation, the expected political tightening of the Federal Reserve has intensified volatility in debt capital markets, and benchmark US Treasury yields are trending on the rise. Since the start of this year, the volume of Chinese offshore bond issuance has declined slightly year on year. However, the structure continued to improve, with a more diversified sector allocation of issuers and a further improved corporate debt structure. According to the National Development and Reform Commission, in the first three quarters of this year, a total of 261 Chinese enterprises issued 465 medium and long-term bonds abroad, for a total amount of $ 158.76 billion. Representing 50.2%, the Chinese company continued to maintain its position as the largest issuer of Asian G3 bonds. It should be noted that Chinese companies have become prolific issuers of green, social, sustainable and sustainability-linked offshore bonds (GSSS bonds) this year, actively meeting the targets of “peak carbon emissions and carbon neutrality. “. In the first three quarters, Chinese companies issued 64 GSSS bonds overseas, for a total amount of $ 22.6 billion, up 163.1% year-over-year, based on NDRC data. CICC has entered into several benchmarking agreements, ranking the top in Chinese offshore bond underwriting[1].

Meanwhile, in September, the Southbound Bond Connect was launched, marking the two-way financial opening of China took another step forward. “The Southbound Bond Connect will be conducive to improving the relevant institutional arrangements in the two-way opening of from China bond market and offering more investment channels in international financial markets for mainland Chinese investors ”, Wang sheng noted.

At 29 october, from China government bonds were officially included in the FTSE World Government Bond Index (WGBI), marking the inclusion of from China government bonds in the three major global bond indices – Bloomberg Global Aggregate Index, JPM GBI-EM Global Diversified Index and FTSE World Government Bond Index (WGBI). After years of development, China is currently the second largest bond market in the world[2]. “Inclusion has sparked business momentum and boosted liquidity of Chinese bonds in international bond markets,” Wang sheng added.

About China International Capital Corporation (CICC)

China International Capital Corporation Limited (CICC, 03908.HK , 601995.SH) is a leading investment bank, founded in China in 1995, providing first-class financial services to businesses, institutions and individuals around the world. As the first international investment bank in joint venture in China, CICC plays a unique role in supporting from China economic reforms and liberalization by providing comprehensive domestic, foreign and cross-border financial services, including investment banking, stocks, FICC, asset management, private equity, wealth management and research. Based at Beijing, CICC has more than 200 branches in mainland China and offices in Hong Kong SAR, Singapore, new York, London, San Francisco, Frankfurt and Tokyo. For more information on CCIC, please visit www.cicc.com

SOURCE China International Capital Corporation Limited


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