Despite indications that it will be priced with a fairly tight yield, there has been no shortage of demand for the latest bond offering from China Development Bank (CDB), reflecting the abundance of liquidity in the market and the strong appetite for China debt, according to market participants.
Orders for the US$1 billion, 10-year offering topped U$5 billion yesterday, with the book still open to United States investors, market sources said.
The strong demand had prompted the arranging banks to tighten the yield guidance to between 86 and 89 basis points over the 10-year US treasury from 90 basis points at the beginning of the week-long roadshow, they said.
The price was expected to be fixed in the middle of that range in New York today, the sources said.
BNP Paribas and Merrill Lynch are joint global co-ordinators for the sale, with Barclays Capital, Citigroup, Goldman Sachs, HSBC Holdings, JP Morgan and UBS as joint bookrunners.
CDB, which lent money to the Three Gorges Dam and the Qinshan Nuclear Power Plant, is the largest of the mainland's three state-owned policy banks and provides long-term funding for medium and large public works projects.