The Ministry of Finance priced today a 3-year bond denominated in Chinese yuan - Panda bonds - for a nominal amount of RMB 3bn. The bond maturing on 26 August 2019 yields 3.4% p.a. The transaction will be settled on 26 August 2016.
Simultaneously the Ministry entered into a hedging transaction swapping the proceeds into euros. After swap the yield was negative at -0.173% p.a.
The bond issue attracted wide interest among investors therefore the demand was twice the issuance amount. The bonds have been allocated to Chinese institutional investors. Most of buyers were the investors visited by representatives of the Ministry during the roadshow in May.
The transaction was done in Chinese onshore interbank bond market based on the issuance program registered by NAFMII (National Association of Financial Market Institutional Investors). Bank of China and HSBC were the bookrunners