CCB planning offshore yuan bond issue in London

China Construction Bank (CCB), the country’s No 2 lender by market value, is planning to issue an offshore yuan bond in London, a move to further promote China’s currency outside Asia as Beijing accelerates the process to make it international.

The dim sum bond, which will be capped at 2.5 billion yuan (US$400.6 million), is expected to be issued through CCBL Funding PLC in London and guaranteed by CCB , rating agency Fitch said in a statement on Friday.

All funds raised will be used to develop CCB’s offshore yuan business and for other general corporate purposes, Fitch said.

The issue follows HSBC’s sale of a 2 billion yuan dim sum bond in April, which was well received among European investors and the order book reached 4.4 billion yuan from more than 100 accounts.

China’s Industrial and Commercial Bank , the largest bank in the world, sold a 100 million yuan certificate of deposit (CD) via its London subsidiary in May.

The new issue from CCB will consolidate London’s position amid fierce competition from Singapore, Australia and Taiwan to become the world’s second offshore yuan centre after Hong Kong.