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BoCom eyes US$3b yuan bonds
By Maggie Zhang |
February 24, 2011, Thursday
|
Print Edition
Print Edition
THE Bank of Communications yesterday said it plans to issue up to 20 billion yuan (US$3 billion) in yuan-backed bonds in Hong Kong to replenish capital.
The fifth biggest bank on the Chinese mainland will issue up to 10 billion yuan of the bonds with a maturity of between 2-5 years in the special administrative region this year, BoCom said yesterday in a statement.
The bonds, whose returns will be settled later, will be issued to retail and institutional investors in Hong Kong. The capital raised will be used to replenish the bank's credit.
"The move will expand our capital channel and support a healthy and stable business development," the Shanghai-based bank said.
Yuan-backed bonds are growing rapidly in Hong Kong since they debuted there in 2007 as the city is used a testing ground to liberalize the yuan and is being promoted as an offshore market for the currency. Daily yuan turnover in Hong Kong has reached nearly US$500 million.
The Ministry of Finance has also issued a combined 14 billion yuan of yuan-backed treasury bonds in Hong Kong in 2009 and 2010.
Financial institutions also seek to develop and distribute yuan-backed financial and derivative products.
"As the second largest economy in the world, it is inevitable the yuan will play a bigger role in the global foreign exchange market," said an ANZ report.
The fifth biggest bank on the Chinese mainland will issue up to 10 billion yuan of the bonds with a maturity of between 2-5 years in the special administrative region this year, BoCom said yesterday in a statement.
The bonds, whose returns will be settled later, will be issued to retail and institutional investors in Hong Kong. The capital raised will be used to replenish the bank's credit.
"The move will expand our capital channel and support a healthy and stable business development," the Shanghai-based bank said.
Yuan-backed bonds are growing rapidly in Hong Kong since they debuted there in 2007 as the city is used a testing ground to liberalize the yuan and is being promoted as an offshore market for the currency. Daily yuan turnover in Hong Kong has reached nearly US$500 million.
The Ministry of Finance has also issued a combined 14 billion yuan of yuan-backed treasury bonds in Hong Kong in 2009 and 2010.
Financial institutions also seek to develop and distribute yuan-backed financial and derivative products.
"As the second largest economy in the world, it is inevitable the yuan will play a bigger role in the global foreign exchange market," said an ANZ report.
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