CICC Facilitates China’s MoF’s US$3bn Sovereign Bonds Offering

On October 11, 2018, the Ministry of Finance (“MoF”) on behalf of the central government of the People’s Republic of China completed a landmark issuance of USD 3 billion sovereign bond in Hong Kong. This is China's largest USD sovereign issuance in terms of issuance size. The total bond offering consists of USD 1.5 billion in 5 years, USD 1 billion in 10 years and USD 0.5 billion in 30 years. The issuance is unrated. China International Capital Corporation (“CICC”) acted as Joint Lead Manager and Joint Bookrunner.

On the pricing day, the bond was announced with initial price guidance of T5+50bps, T10+65bps and T30+90bps. With overwhelming global market demands, the issuance attracted many sovereign funds and international institutional investors which led to a strong orderbook of over USD 13 billion, realizing a 4-time oversubscription. The final price for the 5-year was tightened to T5+30bps with reoffer yield at 3.330% and coupon at 3.250%; the final price for 10-years was tightened to T10+45bps with reoffer yield at 3.630% and coupon at 3.500%, and the final price for the 30-year was tightened to T30+70bps with reoffer yield at 4.055% and coupon at 4.000%. This USD sovereign bond is among lowest yield issuance within the Asia and Emerging Markets recently.

Despite the overnight market fluctuation resulted from the intensified trade friction and the hike in US treasury, the sovereign bond issuance achieves an outstanding pricing result. The success of this sovereign bond issuance demonstrates the international investor’s confidence in China’s capability in addressing the trade friction challenges and the stable and long-term development of China economy. With multiple tranche offering, the diversified tenor will complement the benchmark yield curve for China sovereign and establish a market standard basis for all the Chinese corporations in the international capital market.

Continuing the previous issuance of USD 2 billion sovereign bond in 2017, CICC was, once again, the only Chinese investment bank to act as the Joint Lead Manager and Joint Bookrunner for this highly significant and prestigious sovereign bond issuance, showing our exceptionally dominating position in the international debt capital market. “People-oriented with nation in mind”, “Chinese roots and international reach”, CICC is faithful to serve our values and principals, and will continue to provide all-around financial services for the sustainable development of the Chinese economy and financial market.