China’s Ministry of Finance said it issued a US$4 billion sovereign bond in Hong Kong, with strong global demand pushing total orders to US$118.2 billion, about 30 times the issuance size.
The offering comprised US$2 billion each of three-year and five-year tranches, priced at yields of 3.646 percent and 3.787 percent, respectively.
The five-year tranche was particularly popular, with demand reaching 33 times oversubscribed.
The bonds will be listed on the Hong Kong Stock Exchange.
Investor participation was broad, with 53 percent of demand coming from Asia, 25 percent from Europe, 16 percent from the Middle East, and 6 percent from the United States.
By investor type, sovereign institutions took 42 percent, banks and insurers 24 percent, fund managers 32 percent, and dealers 2 percent, the ministry said.
HSBC (0005), a joint lead manager of the deal, said the strong reception reflected “international market’s strong confidence in the growth potential of China's economy.”
David Liao, Co-Chief Executive for HSBC Asia-Pacific and the Middle East, said China’s recently rannounced recommendations for the 15th Five-Year Plan, which highlights "high-standard opening up", "the innovative development of trade", and "two-way investment cooperation", demonstrates the country’s continued commitment to openness and collaboration.
Meanwhile, the second issuance of MoF’s US dollar-denominated sovereign bonds in Hong Kong since 2021 underscores Beijing’s support for Hong Kong’s development as an international financial center, Liao said the issuance will deepen the city’s bond market and help establish a more reliable offshore yield curve, offering a useful benchmark for Chinese corporates issuing US dollar bonds abroad.
