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Investors are rushing to gain exposure to China
Published on: 2020-11-23
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China has sold its first negative-yielding sovereign bond, a euro-denominated deal that drew bumper demand from European debt investors facing record-low returns across the region.

The offering, which drew in about €18bn worth of orders for €4bn of bonds, is the latest sign that investors are rushing to gain exposure to China as it recovers from the pandemic more quickly than Europe or the US.

The bond sale by China’s finance ministry gave large institutional investors the opportunity to grab higher yields than those available in Europe, where central bank easing to cushion the economic blow of the pandemic has pushed interest rates to record lows.

Yield on the five-year, €750m bond issued by China was priced 0.3 percentage points above the benchmark mid-swap rate of minus 0.45 per cent, offering investors an effective interest rate of minus 0.15 per cent, according to a term sheet seen by the Financial Times.

The rest of the euro-denominated debt offering was composed of a 10-year €2bn bond and a 15-year €1.25bn bond, carrying yields of 0.318 per cent and 0.665 per cent, respectively.

By comparison, the yield on the five-year German Bunds, which are typically seen as a safe haven, hovered around minus 0.74 per cent on Thursday.

Bankers said the five and 10-year offerings were largely snapped up by central banks and sovereign investment funds, while the 15-year tranche skewed towards European asset managers, insurers and pension funds.

China’s finance ministry had expressed concerns over issuing a negative-yielding bond last year when it issued its first euro-denominated bonds, according to bankers on the deal, but it has since become more comfortable with the concept.

中国首发负利率主权债券受国际热捧

近日,中国财政部顺利发行40亿欧元主权债券,首次实现负利率发行。然后历史性一幕上演了:此次以欧元计价的债券被国际投资者抢购!

财政部表示,此次发债是2019年重启欧元主权债券发行后连续第二年发行,取得了截至目前我国境外主权债券发行的最低收益率。其中5年期采用溢价发行,票息0%,首次实现负利率发行。

具体而言,5年期7.5亿欧元,发行收益率为-0.152%;10年期20亿欧元,发行收益率为0.318%;15年期12.5亿欧元,发行收益率为0.664%。从簿记情况看,国际投资者认购踊跃,订单规模达到发行量的4.5倍,投资者群体丰富,涵盖央行、主权基金、超主权类及养老金、资管和银行等。

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