China’s debut sovereign green yuan bond sale in Canada draws strong demand

Résumé détaillé

China’s successful debut in Canada’s sovereign green bond market is expected to broaden the global reach of offshore yuan assets and strengthen the Chinese currency’s role in…

China’s successful debut in Canada’s sovereign green bond market is expected to broaden the global reach of offshore yuan assets and strengthen the Chinese currency’s role in North American financing and investment, according to executives of the banks involved in the issuance.

The 4 billion yuan ($599 million) offering attracted strong demand from international investors, with total orders reaching 54.04 billion yuan, or 13.5 times the amount issued. The oversubscription highlights growing investor appetite for yuan-denominated green assets and confidence in China’s sovereign creditworthiness, the bankers said.

Jerry Zhang, global head of RMB commercialisation and global head of banks and brokers dealers at Standard Chartered, said that against a backdrop of increasingly diversified global asset allocation, the issuance sends a clear signal of China’s continued commitment to expanding financial opening-up and advancing the internationalization of the yuan.

“The offering will help enhance global recognition of yuan-denominated assets and their appeal to investors, while contributing to the further development of the offshore yuan ecosystem,” Zhang said.

“Strong investor demand also underscores the international capital market’s high regard for China’s sovereign creditworthiness and its confidence in the long-term investment value of yuan assets,” she added.

Mark Wang, president and chief executive officer of HSBC China, said the issuance marks another important step in China-Canada financial cooperation, following the renewal of the bilateral local currency swap agreement between the two countries’ central banks in January. It also provides fresh impetus for sustainable development.

“The bonds attracted strong market demand, with the oversubscription ratio reaching a record high for the Ministry of Finance’s offshore yuan sovereign bond issuances in recent years.

China’s Ministry of Finance issued the 4 billion yuan in sovereign green bonds in Toronto on Nov 9 local time…

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