Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

China raises $4 billion in U.S. dollar bond after attracting strong investor demand

Stock MarketsOct 20, 2021 01:56PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. FILE PHOTO: A picture illustration shows U.S. 100 dollar bank notes taken in Tokyo August 2, 2011. REUTERS/Yuriko Nakao 2/2

By Scott Murdoch

HONG KONG (Reuters) -China has raised $4 billion through a U.S. dollar sovereign bond issue, a term sheet showed, with the offer attracting robust demand from offshore investors despite an ongoing regulatory crackdown across industries and problems in the property market.

Investor bids for the four tranche deal reached $23.2 billion, nearly six times the amount raised, official statistics published by advisers showed on Wednesday.

The sale comes at a tricky time for China: its economy is slowing, while investors are worried about a regulatory crackdown and potential contagion from China Evergrande Group's debt problems.

The strong appetite came after finance ministry officials told investors on a call on Monday they were confident cash-strapped developer Evergrande posed no systemic risk, three people with knowledge of the matter said. The sources could not be named as the information had not been made public.

The Finance Ministry did not immediately respond to Reuters' request for a comment.

A People's Bank of China official also said on Friday that the spillover effect of Evergrande's debt problems is controllable and individual financial institutions' risk exposures are not big

Evergrande shares remain in a trading halt on the Hong Kong Stock Exchange after it missed a number of offshore bond interest repayments in the past few weeks. It is grappling with more than $305 billion worth of liabilities.

The pricing for China's dollar-denominated sovereign bond was set at 6 basis points (bps) above U.S. Treasuries for the three-year tranche, 12 bps over for the five-year, 23 bps higher for the 10-year and 53 bps above for the 30-year tranche.

Final pricing for the deal was significantly lower than first flagged.

Initial pricing guidance was given to investors at 35 bps over Treasuries for the three-year tranche, 45 bps on the five-year tranche, 55 bps on the 10-year tranche and 85 bps on the 30-year tranche.

The spreads on each of the tranches were the lowest ever for a sovereign bond issue from China, the three sources with direct knowledge of the matter said.

The three- and 10-year tranches each raised $1 billion, the 5-year raised $1.5 billion and the 30-year $500 million, the term sheet showed.

Asian banks were strong buyers of the shorter dated bonds because of their capital requirements, while U.S. investors were more active in purchasing the longer dated tranches, statistics on the deal showed.

The bond offering comes as the world's second-largest economy posted its slowest pace of growth in a year in the third quarter, hurt by power shortages, sporadic COVD-19 outbreaks and a weakening property sector.

Investors questioned the economic implications of the power cuts but were assured China's fundamentals remained strong, the sources with direct knowledge said.

The finance ministry also flagged that China would likely carry out a euro denominated bond before the end of the year, copying the pattern of issuance it initiated in 2020, the sources said.

The ministry did not immediately respond to a request for comment.

China raises $4 billion in U.S. dollar bond after attracting strong investor demand

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Jack Bquick
Jack Bquick Oct 20, 2021 6:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
At least these investors will get a tax loss write-off when their bonds comeback worthless.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email