China to issue bonds worth 8 billion yuan in Hong Kong

November 22, 2010 | 22:03

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China said Monday it would issue yuan-denominated government bonds worth $1.2 billion in Hong Kong, in its second RMB bond sale as Beijing tries to internationalise its currency.

Eight billion yuan of bonds will be sold to institutional and retail investors in the second offering of its kind in the financial hub, following a sale worth around six billion yuan in September last year.

A statement by the Ministry of Finance in Beijing said bonds worth five billion yuan with maturities set at three, five and 10 years will be offered to institutional investors, according to Dow Jones Newswires.

The remainder of the debt will have a maturity of two years and will be available to retail buyers.

Hong Kong is aiming to be a test bed for internationalising China's currency, while Beijing is seeking to broaden the use of its currency in the city after approving its use to settle cross-border trade in 2009.

In July central banks in China and Hong Kong signed agreements to further ease restrictions on yuan usage and the currency's circulation in the city.

K. C. Chan, the city's Secretary for Financial Services and the Treasury, said the bond sale was "a further demonstration of the Central Government's support of the development of Hong Kong's bond market".

AFP

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