China makes preparations to issue dollar bonds in Hong Kong this week
Ministry of Finance will meet investors on Wednesday for the country’s first sovereign bond issue in 13 years, which will come in equal five and 10-year tranches
China could issue its first dollar bond since October 2004 in Hong Kong as early as Thursday, according to sources.
The Ministry of Finance will hold an investor presentation for the planned US$2 billion sovereign issue on Wednesday, said sources who did not wish to be named. It has hired 10 joint lead-underwriters and joint bookrunners, including four international banks – Citigroup, Deutsche Bank, HSBC and Standard Chartered Bank for the unrated senior bonds.
The Chinese joint lead-underwriters are Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, Industrial & Commercial Bank of China and China International Capital.
The issue comprises equal tranches of five-year and 10-year notes.
Governments typically pay a fee to international credit agencies to obtain a rating to provide investors with an assessment of the quality and risk of their debt. However, Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s did not rate the bonds, according to a statement by Bank of China on its website.
While many local-currency denominated sovereign bonds such as from Australia and Thailand have been unrated in the past two years, all Asian governments have rated their US dollar denominated bonds, according to data from Thomson Reuters.