Bonds News
- Bond draws strong demand
Date: 22-Aug-2007 Sources: (Shenzhen Daily)
EXPORT-IMPORT Bank of China's 2 billion yuan (US$264 million) bond issue in Hong Kong, China's second offshore yuan bond offering, was nearly 2.7 times subscribed, the bank said yesterday.
Export-Import Bank, a policy bank, said subscriptions exceeded 5.3 billion yuan but the final size of the issue would still be 2 billion yuan, split equally between retail and institutional investors.
Yuan bonds are seen as a relatively safe bet on further appreciation of the yuan currency. However, subscriptions to Export-Import Bank's issue were much lower than for the first yuan bond issue overseas - China Development Bank's 5 billion yuan offering in Hong Kong last month, which drew demand of more than 14 billion yuan.
The issues are only open to Hong Kong residents with yuan accounts at local banks.
Export-Import Bank's issue, which closed Monday and will start trading Friday, drew more than 30,000 applications from retail investors. Each retail investor would be allocated at least one board-lot of the bond, the bank said. The issue carries a 3.05 percent annual coupon. It is priced at par and the retail tranche is a two-year paper while the institutional tranche has a three-year tenor.
The government earlier this year gave mainland financial institutions the green light to issue yuan bonds in Hong Kong, expanding the city's role as a center for yuan business and as a testing ground for gradual liberalization of the Chinese currency. More issues are expected in coming months.
HSBC and Bank of China (Hong Kong) are joint lead managers on the issue as they were for the China Development Bank bond. CITIC Securities is joint lead manager of the institutional tranche and lead arranger of the retail tranche.
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