CHINA is planning a record sale of sovereign bonds in U.S. dollars, with a potential US$6 billion offering, after having earlier this month sold debt in euros for the first time since 2004. The Ministry of Finance has mandated 13 banks, to handle the sale, a mandate announcement from one of the banks showed yesterday. A term sheet seen yesterday showed there will be four tranches of bonds, which have not been rated by any agency. A person familiar with the transaction said the tranches would be three, five, 10 and 20 years in maturity. It would be the third transaction since 2017 when China launched its first U.S. dollar bond in 13 years. The 2017 deal raised US$2 billion while a separate transaction in 2018 raised another US$3 billion. The dollar debt sale underscores China’s continued interest in building out an offshore market where its companies and local authorities can tap funding. The 20-year note will fill a gap between 10-year and 30-year securities issued in 2018. Refinitiv data show U.S. dollar-denominated debt makes up 7.54 percent of China’s total outstanding debt. China sold its first euro-denominated bond earlier in November, raising US$4.4 billion, or 1.02 percent of the country’s debt pool, according to Refinitiv. “It reaffirms China’s determination to develop an orderly offshore dollar bond market for Chinese issuers,” Anne Zhang, head of fixed income for JP Morgan Private Bank in Asia, said of the offering. “The new deal will further complete a sovereign curve.” (SD-Agencies) |