China’s sovereign bond sale in Hong Kong draws global interest, raising over US$2 billion
Arriving hot on the heels of the city’s landmark China government bond futures rollout, the latest tranche reinforces Hong Kong's role as a ‘superconnector’
China’s Ministry of Finance has successfully raised 15 billion yuan (US$2.22 billion) through a sovereign bond auction in Hong Kong, tapping international capital just days after the city launched a long-awaited tool designed to help global investors hedge against mainland bond market risks.
According to the details released following the auction, the ministry raised 5 billion yuan for the two-year tranche, 4 billion yuan for each of the three-year and five-year tranches, and 1 billion yuan each for the longer-term 15-year and 30-year bonds.
The couple rates was set at 1.27 per cent for the two-year bonds, 1.3 per cent for the three-year bonds, 1.43 per cent for the five-year bonds, 1.99 per cent for the 15-year bonds and 2.24 per cent for the 30-year bonds.
The strong performance validated predictions of robust investor appetite, which analysts attributed to a shortage of high-quality yuan-denominated assets and expectations of currency appreciation.
At Monday’s listing ceremony, Financial Secretary Paul Chan Mo-po described the new futures contract, together with Swap Connect, as crucial instruments in creating “a more comprehensive risk management framework for offshore renminbi fixed-income products”.