CHINA raised US$6 billion in its biggest-ever international sovereign bond sale Tuesday, as it pounced on the year’s sharp dive in borrowing costs.

The finance ministry sold the bonds in four tranches. A 3-year issue priced 35 basis points above benchmark U.S. Treasuries, a source at one of the managing banks said. A 5-year bond priced at 40 basis points above Treasuries, a 10-year at 50 basis points above Treasuries and a 20-year tranche at 70 basis points above Treasuries, the source said.

The deal comes after a market rally this year that has driven global bond yields sharply lower, significantly decreasing the cost of financing compared with its previous dollar issuance in October 2018.

The US$6 billion total was roughly double the original target and order books — or demand — for the bonds had been over US$20 billion earlier in the day, according to Refinitiv capital markets news service IFR.

“This has been the largest Reg-S offering [offshore offering] by an Asian sovereign issuer to date,” said Sam Fischer, head of China onshore debt capital markets at Deutsche Bank, one of 13 banks mandated to lead the sale.

China’s finance ministry had signalled the move would help it improve its bond yield curve.

It will “provide a pricing benchmark for Chinese enterprises issuing U.S. dollar bonds,” Bank of China said in a statement on its website Tuesday.

The sale marked only the third dollar bond sale since China revived its international debt issuance program two years ago after a 13-year hiatus.

That comeback deal in 2017 raised US$2 billion while a separate transaction in 2018 raised US$3 billion. (SD-Agencies)