China to issue U.S. dollar bonds in four tranches of up to 30 years – term sheet

China will issue dollar-denominated, multi-tranche bonds in tenors of three, five, 10 and 30 years, according to a term sheet seen by Reuters on Tuesday.

The Ministry of Finance mandated 14 banks on Monday for the issuance, which, according to two sources with direct knowledge of the matter, is expected to raise about $4 billion.

Demand for the deal reached $15 billion by noon Hong Kong time on Tuesday, according to a message sent to investors.

Pricing is expected to be finalised Wednesday in Asia following the New York trading session.

In a term sheet sent to investors, initial price guidance for the offering is 35 basis points over Treasuries for the three-year tranche, 45 basis points on the five-year tranche, 55 basis points on the 10-year tranche and 85 basis points on the 30-year tranche.

Such bonds are typically in high demand from global investors due to their scarcity and high yields.

China last raised $6 billion in a U.S. dollar denominated bond sale in October 2020, which was the first time U.S. based investors were able to participate in the deal.

Moody’s said on Monday it has rated the proposed issuance as A1, its highest ranking, with a stable outlook.

The bond offering comes as the world’s second-largest economy hit its slowest pace of growth in a year in the third quarter, hurt by power shortages and wobbles in the property sector..

China’s Ministry of Finance did not respond to faxed questions sent by Reuters on Tuesday.
Source: Reuters (Reporting by Scott Murdoch in Hong Kong and Anushka Trivedi in Bengaluru; Editing by Kim Coghill & Shri Navaratnam)