China plans to issue RMB 23 billion of sovereign bonds in Hong Kong

By Susanna Moon

Chicago, June 14 - The Chinese Ministry of Finance plans to issue RMB 23 billion of sovereign bonds in Hong Kong this month.

Of the total amount, RMB 2 billion will be issued to overseas central banks, RMB 15.5 billion to institutional investors through Hong Kong's central money markets unit and RMB 5.5 billion to retail investors.

The issue offers for the first time renminbi sovereign bonds with a 15-year maturity for institutional investors, which helps set the benchmark yield for long-term renminbi bonds in Hong Kong, according to a government notice.

This is the government's fourth issue in Hong Kong and exceeds the amount issued last year, the release noted.

In a separate release, the Hong Kong Monetary Authority said it will establish a new HKMA CMU central bank placement coordinating window for central banks to subscribe the bonds. Bonds issued through this window will have the same coupon as the successful tenders of the same tenor.

"The HKMA is delighted to continue to provide the tendering platform for the issuance of offshore renminbi sovereign bonds," Peter Pang, deputy chief executive of HKMA, said in the release.

"The establishment of the new HKMA CMU central bank placement coordinating window will further promote the development of Hong Kong's renminbi bond market by expanding the investor base to include central banks and monetary authorities, and consolidate the role of Hong Kong as the global hub for offshore renminbi business."

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