In London, first-ever offshore sovereign renminbi bond issued
China’s Ministry of Finance listed its first sovereign offshore renminbi bond on the London Stock Exchange on Wednesday, marking a significant milestone in increasing London’s offshore renminbi liquidity currency and signaling the renminbi’s potential as a global reserve currency.
The 3 billion renminbi ($458 million) three year bond is the first offshore renminbi bond issued by the Ministry of Finance outside of China.
It is expected to act as a benchmark to aid the future pricing of renminbi assets and so encourage the issuing of more offshore renminbi investment products. Bank of China and HSBC are joint global coordinators of the bond.
Shi Yaobin, vice-minister of finance, said the Chinese and the UK governments have made joint efforts during the process of issuance.
“The bond issuance reflects the principles of reciprocal cooperation and mutual benefit.”
The Bank of England’s acceptance of the bond as an eligible collateral instrument increases its attractiveness to investors, as holders of this bond can swap it with the BoE for sterling for short-term liquidity purposes.
Harriett Baldwin, the UK’s economic secretary to the treasury, said the bond’s issuance is “a golden moment” in the relationship between the United Kingdom and China, and the UK government is committed to further helping improve the renminbi’s internationalization.
Gao Yingxin, executive vice-president of Bank of China, said orders for the bond have been received from a wide range of investors.
British and Chinese officials greet the launch of China’s sovereign offshore renminbi bond in London.