CITIC raises funds by sell­ing Sa­mu­rai bonds


CITIC Group Corp has started mar­ket­ing yen-de­nom­i­nated bonds to Ja­panese in­vestors, the first sale of “Sa­mu­rai bonds” by a Chi­nese main­land is­suer for over­seas bor­row­ers in two decades.

CITIC, China’s first State-owned in­vest­ment cor­po­ra­tion, is mar­ket­ing five-year notes at a yield of 0.67 per­cent to 0.72 per­cent, and may of­fer debt as long as 20 years de­pend­ing on de­mand, ac­cord­ing to a per­son fa­mil­iar with the mat­ter. CITIC was one of the last Chi­nese sell­ers in the Sa­mu­rai mar­ket in 1996, ac­cord­ing to data com­piled by Bloomberg.

Sa­mu­rai sales have de­clined 20 per­cent from a year ear­lier to 1.08 tril­lion yen ($10.4 bil­lion) since April 1 and is­suance is run­ning at a four-year low as euro and dol­lar mar­kets have of­fered global is­suers lower rates when swap­ping funds out of yen. HSBC Hold­ings Plc un­der­took the big­gest Sa­mu­rai bond sale in more than seven years last month when it sold notes that helped boost its reg­u­la­tory buf­fers, and of­fered in­vestors higher yields.

Ja­panese cor­po­rate bonds of­fer in­vestors an av­er­age yield of 0.21 per­cent as of Fri­day, up from a record low of 0.09 per­cent in July, ac­cord­ing to No­mura BPI in­dexes. Sa­mu­rai bonds of­fer more than dou­ble that yield, ac­cord­ing to the data.

Bei­jing-based CITIC Group is rat­edBBB+ by Ja­pan’s Rat­ings& In­vest­ment In­for­ma­tion Inc, its third­low­est in­vest­ment grade rat­ing, and one grade higher by bothS&PGlobal Rat­ings and Moody’s In­vestors Ser­vice. In­dus­trial & Com­mer­cial Bank of China Ltd, also based in Bei­jing, sold 15 bil­lion yen in notes listed on the Tokyo Stock Ex­change’s ProBond mar­ket in June. The notes weren’t Sa­mu­rai debt.


A China CITIC Bank stand at a fi­nan­cial expo in Guangzhou.

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