The story appears on

Page A10

September 1, 2016

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Finance

Landmark SDR yuan bonds issued

THE World Bank yesterday issued landmark bonds denominated in special drawing rights (SDR) in China’s interbank market.

The three-year bonds were sold at 0.49 percent, two sources with direct knowledge of the deal told IFR, a publication of Thomson Reuters, at the lower end of the World Bank guidance at 0.4-0.7 percent.

A statement from the People’s Bank of China said the 500 million SDRs (US$700 million) issue, which was settled in yuan, was 2.47 times oversubscribed, and that interested buyers numbered around 50.

A much bigger wave of such bonds could be expected as the global lender has got approval from the PBOC for a 2-billion SDR program.

The issue, the first SDR bond in 35 years, is being watched by investors as it’s part of a wider push in China to raise the net supply of such bonds.

Analysts say China will be keen to foster interest in the SDR debt program as it steps up efforts to internationalize the yuan, and further liberalize its capital markets.

IMF last November decided to include the yuan in its SDR basket as China seeks full integration with the international monetary system.

The yuan will be formally added to the basket on October 1.

Some analysts argue that the SDR bond may provide Chinese investors an opportunity to diversify their portfolios since the country’s control on capital outflows in the past year has made it difficult to buy overseas assets.

ANZ analysts said they expected China to encourage policy banks and other organizations such as the Asian Infrastructure Development Bank to sell SDR bonds and some of the issuance may be in offshore market.

The SDR is a synthetic reserve currency administered by the IMF, whose value is determined by a basket of other major world currencies.

ICBC, China Construction Bank, China Development Bank and HSBC (China) were the lead underwriters of the bond.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend