People’s Republic of China's €4 Billion Sovereign Bonds Offer
The Ministry of Finance of the People’s Republic of China (MOF) successfully priced €4bn of sovereign bonds, comprising €0.75bn 5-year bonds (yield: -0.152%), €2bn 10-year bonds (yield: 0.250%) and €1.25bn 15-year bonds (yield: 0.625%). Following the €4bn sovereign bonds issued by the MOF last year with a tenor of 7 years, 12 years and 20 years, respectively, this issuance further improves the yield curve of the euro-denominated sovereign bonds of the PRC government and provides an important benchmark for euro financings and pricing by Chinese enterprises.
This issuance has attracted an order book of nearly 4.5 times the issue size from international investors. The 5-year euro sovereign bonds have been priced with a negative yield due to the strong demand during the bookkeeping and filing stage, and the narrowing of the price range exceeding expectations. This is the first euro-denominated bonds issuance by an issuer in Greater China with a negative yield. The successful issuance is a testament to the strong confidence of international investors in the sovereign credit of China and will help promote the economic and financial cooperation between China and Europe.
The transaction was led by capital markets partner William Liu (Picture), with support from counsel Karen Cheng and managing associate Allen Zhang.
The Allen & Overy team advised Bank of China, Bank of Communications, China International Capital Corporation, BofA Securities, Crédit Agricole CIB, Deutsche Bank, Goldman Sachs (Asia) L.L.C., HSBC, J.P. Morgan, Société Générale Corporate & Investment Banking, Standard Chartered Bank and UBS.
The Allen & Overy team comprised partners Agnes Tsang and Jaclyn Yeap supported by Jiayin Yu and Gordon Ng.
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