China to issue U.S. Dollar bonds on Tuesday

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BEIJING- China will start issuing overseas dollar sovereign bonds on Tuesday and the expected size will surpass the $3 billion record last 2018, Chinese finance ministry official stated.

“The size of issuance will surpass that of previous years,” according to the official.

Chinese Finance ministry is yet to disclose further details about the implementation which will ameliorate China’s offshore bond yield curve, the official added.

In line, China’s government mandatorily commanded 13 banks to start the US dollar sovereign bond pact, its third application since the revival of its international debt issuance program two years ago.

The starting prices for the three-, five-, 10-, and 20-year tranches range from 60, 65, 70, and 75 basis points respectively and are higher than US Treasuries of the similar tenor.

This would be the third arrangement since 2017 when China started its first ever US dollar bond in 13 years. The 2017 transaction tallied a $2 billion increase while a separate deal made the following year hit another $3 billion.

Just last November, China sold its first euro-denominated bonds in 15 years raising $4.4 billion and financial analysts predicted that European markets are set to be the mainland’s source of funds in the coming years.  

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