China’s Bond Issue
- China is reportedly close to issuing its first dollar bond sale in 13 years. The makeup of the bond will be a US$2 billion dollar denominated sovereign bond which will consist of US$1 billion of five year bonds and US$1 billion of 10 year bonds. This issue comes at a period were sovereign bond yields are at a multi-year low.
- China’s intended sale of the bonds was announced back in June this year by the ministry of finance, with the period of sale proposed for the second half of this year.
- Analysts view this issue as a bid for china to downplay the recent downgrade of its sovereign rating last year, as China is unlikely to need raising dollars. It is all an effort to show confidence in the country’s financial system.