The Chinese sale, which attracted final orders of about €16 billion ($18.9 billion) for the €4 billion ($4.7 billion) worth of bonds on offer, included 5-year debt priced with a yield of minus 0.152%. China also sold 10-year and 15-year bonds with yields below 1%.
Investors included central banks, sovereign wealth funds and global asset managers spanning Europe, Asia and the United States. European investors accounted for 85% of the 15-year debt and about two thirds of the shorter-dated bonds, according to Deutsche Bank.
“It shows investors are still underexposed to China and there definitely is a scarcity value perceived in these bonds,” said Deutsche Bank’s head of China onshore debt capital markets, Sam Fischer.
The debt sale also indicates that investors want more exposure to China’s economy, which is recovering from the pandemic at a quicker pace than Europe and the United States, banking sources said.
The issuance demonstrates that international investors are “full of confidence in China’s strong economic rebound and its future developments despite the lingering global Covid-19 pandemic,” David Yim, head of capital markets for Greater China and North Asia at Standard Chartered Bank, said in a statement.
In a statement posted to its website, China’s Ministry of Finance said that the bond sale reflects China’s “determination and confidence” to open up to the outside world and further integrate with international capital markets.
This is China’s second major international debt sale in as many months, after it raised $6 billion in October, including from US investors. Last November, the country sold bonds in euros for the first time since 2004, according to Allen & Overy, which advised on the offering.
— Shanshan Wang contributed reporting.