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China sells 3-yr yuan bond at avg 3.4 pct coupon in Hong Kong
December 8, 2016 / 9:54 AM / a year ago

China sells 3-yr yuan bond at avg 3.4 pct coupon in Hong Kong

HONG KONG, Dec 8 (Reuters) - China completed the sale of a second batch of yuan-denominated offshore bonds in Hong Kong this year to institutional investors on Thursday, the eighth consecutive year the Ministry of Finance (MOF) has tapped the market.

Bonds of various tenors were offered, among which the largest amount sold was 5 billion yuan of three-year bonds at 3.4 percent, according to the Hong Kong Monetary Authority.

The five-year, 10-year, 15-year and 30-year tenors were priced at 3.55 percent, 3.85 percent, 4.15 percent and 4.40 percent, respectively. The amounts issued for the respective tranches were 3 billion, 1 billion, 500 million and 500 million yuan.

The MOF sold the first batch of this year’s offshore yuan bonds, worth 14 billion yuan, in June. The second batch include 12 billion yuan that is issued to institutional investors, central banks and monetary authorities outside mainland China and 2 billion yuan that will be issued to Hong Kong residents.

The offshore yuan bond, or dim sum bond, market is facing strong headwinds in the past year as Chinese issuers moved back to the mainland to raise funds more cheaply.

Issuance of dim sum bonds dropped sharply, from 254.2 billion yuan in 2014 to 116 billion yuan in 2015 and only 67.3 billion yuan in the first 10 months this year, according to statistics from China International Capital Corporation (CICC). ($1 = 6.8902 Chinese yuan) (Reporting by Michelle Chen; Editing by Richard Borsuk)

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