China’s Ministry of Finance priced its second offshore renminbi bond of the year on Thursday, raising Rmb12bn (US$1.96bn) in four tranches.
Institutional investors bought Rmb9bn of notes in three tranches. A Rmb4bn three-year piece was priced to yield 2.74%, a Rmb3bn five-year tranche at 3%, and a Rmb2bn 10-year at 3.38%. The remaining Rmb3bn two-year tranche pays a coupon of 2.93% and is targeted at retail investors.
The offering received Rmb17.29bn in orders for the three-year tranche, Rmb8.97bn for the five-year and Rmb7.7bn for the 10-year.
Around Rmb33.96bn of orders were received for the institutional tranches, representing around 3.77 times coverage, higher than the 2.99 times coverage in May auction.
The new issue offered a higher yield at three years than the MoF’s previous offering, while the five-year and 10-year pieces paid less to investors.
On May 21, the MoF priced Rmb16bn of Dim Sum bonds including a Rmb7bn three-year tranche priced to yield 2.53%, a Rmb4bn five-year tranche priced to yield 3.25%, a Rmb1bn seven-year tranche priced to yield 3.8%, a Rmb1bn 10-year tranche priced to yield 4%. It also sold 15-year and 20-year notes at the time, as well as a dedicated placement to central banks.
The MoF’s outstanding 2017s were quoted on Thursday at 3.007%/2.712%, the June 2019s at 3.227%/3.107% and the 2024s at 3.77%/3.67%.
As with the previous issue, the institutional tranches used the CMU BID platform of the Hong Kong Monetary Authority.
This second batch takes China’s 2014 Dim Sum issuance to its target of Rmb28bn, higher than the Rmb23bn issued in 2013 and the sovereign’s biggest annual total so far.
News as taken from http://www.ifrasia.com/ by