China's Agricultural Bank offers US-dollar debt as costs fall to 2009 low

Agricultural Bank of China is marketing a sale of US dollar bonds as the cost of dollar debt for Chinese borrowers slides to the lowest in more than four years.

The mainland's third-largest lender by market value, which is offering the notes through its Hong Kong branch, plans to sell the five-year bonds at about 170 basis points more than similar maturity treasuries, a person familiar with the matter said.

Yield premiums on mainland dollar securities slumped to 346.7 basis points yesterday, the least since September 2009, according to JPMorgan Chase.

Manufacturing grew more than expected last month, an official gauge showed, boosting bets the world's second-largest economy will meet a 7.5 per cent annual growth target set by the government.

The mainland's five-year credit-default swaps, which insure investors against the risk of non-payment, fell last month for the fourth consecutive month, the longest streak of declines in a year, as top Communist Party members flagged financial reforms following their meeting earlier in then month.

"The plenum garnered some goodwill," said Swee Ching Lim, a Singapore-based credit analyst at Western Asset Management. "Recent economic data has been pretty decent as well and, as we head towards the end of the year, we really only have this week and half of next week for deals to come."