The Ministry of Finance, PRC successfully issued 4 billion euros of sovereign bonds on Nov. 18. Among them, the 5-year issue yield of 750 million euros is -0.152%; 2 billion euros for a 10-year issue with a yield of 0.318%; 15-year 1.25 billion euros, offering a yield of 0.664%.

The bond issue is the second consecutive year after the resumption of euro sovereign bond issuance in 2019, achieving the lowest yield so far in China's overseas sovereign bond issuance. Among them, the 5-year issue was issued at a premium with 0% coupon and negative interest rate for the first time. The offering will use a "three-place listing, two-place custody" model, with three listings on the London Stock Exchange, the Luxembourg Stock Exchange and the Hong Kong Stock Exchange. At the same time, in order to support the construction of Hong Kong's international financial center, the liquidation of the 5-year euro sovereign bonds under the custody of the Hong Kong Central Settlement System (CMU) for the first time has effectively promoted the construction of Hong Kong's financial infrastructure. In addition, international rating companies give credit ratings.

From the perspective of bookkeeping, international investors subscribed heavily and the order size reached 4.5 times of the issuance. The investor group was rich, covering the central bank, sovereign funds, super-sovereign classes and pension funds, capital management and Banks. European investors accounted for 72% of the total investment, which reflects the confidence of investors in the international capital market in the steady and improving Chinese economy.

The issuance further improved the yield curve of euro sovereign bonds and consolidated the benchmark for euro bond issuance outside China. The successful issuance of euro sovereign bonds further demonstrates China's determination and confidence in opening up to the outside world at a higher level. It conforms to the trend of economic and financial globalization and will further deepen China's integration with international capital markets and cooperation with international investors.

Source: Ministry of Finance, PRC