China Chengtong Holding Group, the state-owned capital management firm, issued a RMB 1 billion ($139 million) 30-year bond on Wednesday. This is the first ultra-long-term credit debt issued in recent years, reports Nikkei Asia. The proceeds of the bonds, with a coupon rate of 3.35%, will be used to repay existing debt, China Chengtong said. Non-financial bonds with a maturity period exceeding seven years are often categorized as ultra-long-term credit bonds. Major state-owned enterprises, including oil giants such as PetroChina and Sinopec, had previously issued such ultra-long-term credit bonds with coupon rates of around 5%, a fixed-income investor told Caixin. But a 30-year bond with a coupon rate in the 3% range has been rare due to a narrow term spread, the investor said. The term spread is the difference between interest rates on short- and long-dated bonds. Chengtong’s bond, underwritten by Shanghai Pudong Development Bank, received oversubscription of RMB 2.35 billion from 19 investors, 13 of whom eventually purchased RMB 1.61 billion of the bond. Such ultra-long-term bonds normally attract investors such as large insurers, a brokerage said.
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