HSBC is in from the cold as China’s finance ministry adds bank in latest €4 billion bond sale after previous exclusion

HSBC was left off a US-dollar bond fundraising in October, for the first time since 2017

Bank has maintained it has ‘good ongoing’ relationship with Ministry of Finance after getting caught up in rising US-China tensions

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The transaction is expected to price on Wednesday at about €4 billion[euro] (US$4.74 billion), according to one of the people. Photo: AFP

Published: 12:21pm, 18 Nov 2020Updated: 10:38pm, 18 Nov 2020

HSBC is one of a dozen banks chosen to manage the latest international sale of Chinese sovereign bonds after it was left off a dollar-denominated sale last month for the first time since the country resumed issuing international debt in 2017.

The Ministry of Finance issued a mandate this week for multi-tranche, euro denominated bonds to three state-owned banks and nine foreign lenders that also included BofA Securities, Deutsche Bank, Goldman Sachs, JPMorgan Chase and Standard Chartered, according to people familiar with the matter.

The transaction is expected to price on Wednesday at about €4 billion (US$4.74 billion), said one of the people, who was not authorised to discuss the matter publicly.

The biggest of Hong Kong’s currency issuing banks, HSBC was left off a US$6 billion international sale in October, which generated strong interest among US investors. It was the only bank that had taken part in the country’s last US dollar debt sale in November 2019 not to be included. Citigroup, which replaced HSBC on the October issuance, was not among the banks on the latest euro-denominated offering.

HSBC previously declined to comment on specific deals, but said at the time it maintained a “good ongoing working relationship” with the Ministry of Finance.

As the relationship has worsened between Washington and Beijing in the past few years, London-based HSBC has increasingly found itself in the middle of rising tensions between the world’s two biggest economies.