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Banking & finance
BusinessBanking & Finance

Chinese government’s offshore yuan bond sale in Macau nets US$430 million after drawing bids worth twice that

  • Wednesday’s issuance, the second offshore yuan bond offering in Macau, included two tranches of two- and three-year bonds
  • Sale marks a step forward in Ministry of Finance’s effort to develop the offshore bond market while also diversifying the casino hub’s economy

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Macau’s skyline at night. China’s Ministry of Finance aims to help diversify the city’s economy into financial services through the bond offerings. Photo: Shutterstock
Georgina Lee

China’s Ministry of Finance (MOF) successfully sold two tranches of offshore yuan bonds totalling 3 billion yuan (US$430 million) in Macau on Wednesday, marking a step forward in its effort to develop an offshore yuan market.

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It is the second offshore yuan bond issued in Macau by the MOF, after its inaugural 2 billion yuan (US$286 million, at the then exchange rate) offering in 2019, which marked the 20th anniversary of the enclave’s return to Chinese sovereignty.

The latest issuance, comprising a two-year tranche of 2 billion yuan and a three-year tranche of 1 billion yuan, received bids amounting to twice the total available for investors, according to a statement from the MOF. The two tranches pay yields of 2.2 per cent and 2.28 per cent, respectively.

The bonds were priced almost on par with similar offshore yuan bonds sold in Hong Kong, the other offshore yuan bond market for China, which started in 2007, bankers said.
The Macau SAR government held a ceremony Wednesday marking the 3 billion yuan bond issue by China’s Ministry of Finance. Photo: Handout
The Macau SAR government held a ceremony Wednesday marking the 3 billion yuan bond issue by China’s Ministry of Finance. Photo: Handout

“We see an increasing array of investors interested in Macau’s offshore yuan bond, with participation by institutions from South Korea and several Portuguese-speaking countries,” said Stephen Ieong Chi Kuong, managing director at Bank of China Macau, the sole global coordinator for the issue.

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Macau, like Hong Kong, is a key part of China’s Greater Bay Area plan along with nine mainland Chinese cities: Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing.
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