25/10/22

ASIA: Shenzhen to issue offshore yuan local bonds in Hong Kong.

As published on globaltimes.cn, Tuesday 25 October, 2022.

Shenzhen in South China's Guangdong Province announced on Monday that it will issue no more than 5 billion yuan ($688.6 million) of offshore yuan local government bonds to the Hong Kong Special Administrative Region (HKSAR) in the near future, in a bid to further promote the interconnection of financial markets in the Guangdong-Hong Kong-Macao Greater Bay Area.

This is Shenzhen's relaunch of overseas bond issuance after taking the lead in the country to successfully issue offshore local bonds in 2021. Experts noted that the reissue will help investors build up stable expectations, promote long-term value investment of international capital market in Shenzhen as well as the construction of an offshore renminbi center in Hong Kong.

According to the announcement revealed by Shenzhen Finance Bureau, it plans to issue bonds in tenors of two, three, and five years, and the bonds will be listed on the Hong Kong Stock Exchange.

Among them, three-year and five-year bonds are green and blue bonds, and the funds raised will be invested in projects including rail transportation and water pollution control to build a green Guangdong-Hong Kong-Macao Greater Bay Area and promote green and low-carbon development.

Specific issuance arrangements will be announced in a timely manner, the announcement said.

Shenzhen issued offshore bonds in 2021 for the first time, which achieved 3.48 times oversubscription, reflecting the international capital market's full recognition of the city’s development and government credit.

The continued issuance of Shenzhen's bonds in 2022 will gradually improve the pricing benchmark for China's offshore renminbi bonds. Meanwhile, the issuance of yuan variety products will provide international investors with a richer choice of renminbi credit varieties, which is conducive to enhancing the overall attractiveness of the offshore yuan financial products market.