PRC Government’s US$6 Billion And RMB 5 Billion Bond Offering

Linklaters acted as international legal advisor to the Ministry of Finance of the People’s Republic of China on their pricing of US$6 billion and RMB 5 billion of bonds in Hong Kong, respectively.

The US$6 billion bond offering is the largest ever US dollar denominated sovereign bond offering by the PRC government. This issuance has attracted an order book of nearly 3.6 times the issue size from international investors, and is once again a testament to the strong confidence of international investors in the sovereign credit of China.

The US dollar-denominated bonds comprise four series, US$1.5 billion 3-year bonds (yield: 1.929%), US$2.0 billion 5-year bonds (yield: 1.996%) US$2.0 billion 10-year bonds (yield: 2.238%) and US$0.5 billion 20-year bonds (yield: 2.881%), all of which target institutional investors. Attributable to the proper design of tenors and issue sizes, this issuance will not only help improve the yield curve of the US dollar-denominated sovereign bonds of the PRC government but will also provide an important benchmark for US dollars financings by Chinese enterprises.

The issuance of the RMB-denominated bonds comprises RMB 3.5 billion 2-year bonds and RMB 1.5 billion 5-year bonds, making the total issue size of RMB-denominated bonds in Hong Kong reached RMB 15 billion this year.

The Linklaters team was led by partner William Liu (Picture), with support from associate, Allen Zhang.

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Author: Michael Patrini