Explainer: Why is China issuing its first dollar bond after 13 years’ absence from the market?

China said its first US$2 billion global dollar bond offer in 13 years was 10 times oversubscribed, underscoring overwhelming investor demand for the rare bond offering.

The Ministry of Finance said it had received orders of around US$22 billion for the offer comprising two tranches of five-year and 10-year bonds, each worth US$1 billion.

The five-year tranche paid a coupon of 2.125 per cent to yield 2.196 per cent, while the 10-year tranche paid a coupon of 2.625 per cent to yield 2.687 per cent.

Here is why China is issuing dollar bonds.