The Ministry of Finance will sell US$79.2 billion in special government bonds next week to fund the new state foreign-exchange reserve investment agency, the Wall Street Journal reported. The sale will be for the first tranche of a planned US$204.6 billion issue. It is the next step in formalizing the State Investment Company, which has already informally bought a US$3 billion stake in private equity firm Blackstone Group. The bonds will be sold to the central bank to replace reserves it will transfer to the investment agency. However, the ministry will sell the bonds to the central bank via the Agricultural Bank of China, as the law prohibits the central bank from buying government bonds directly from the ministry. The first portion of 10-year bonds will pay a coupon of 4.3%, an anonymous source said. The amount is lower than the 4.37% coupon on government bonds trading in the secondary market. The special bonds are also expected to be used to reduce liquidity in the domestic banking system.