China raised $6 billion in its biggest ever international sovereign bond sale on Tuesday, as it pounced on the year’s sharp dive in borrowing costs, reported Reuters.
The finance ministry sold the bonds in four tranches. A 3-year issue priced 35 basis points above benchmark US Treasuries, a source at one of the managing banks said. A 5-year bond priced at 40 bps above Treasuries, a 10-year at 50 bps above Treasuries and a 20-year tranche at 70 bps above Treasuries, the source said.
The deal comes after a market rally this year that has driven global bond yields sharply lower, significantly decreasing the cost of financing compared with its previous dollar issuance in October 2018.
The $6 billion total was roughly double the original target and order books — or demand — for the bonds had been over $20 billion earlier in the day, according to Refinitiv capital markets news service IFR. “This has been the largest Reg-S offering by an Asian sovereign issuer to date,” said Sam Fischer, head of China onshore debt capital markets at Deutsche Bank, one of 13 banks mandated to lead the sale.