Britain'S Official Issuance Of RMB Bonds Exceeds Expectations, Attracting 5 Billion 800 Million Investment Demand.

Global exchange October 15th, the British government issued a sovereign offshore RMB bond on Tuesday (October 15th). The paction attracted the investment demand of RMB 5 billion 800 million yuan from 85 accounts, far exceeding the planned circulation of RMB 3 billion yuan. It has become the largest renminbi bond paction ever issued outside China.

Highlights the growing global attractiveness of the renminbi.

George Osborne, the chancellor of the exchequer, said in a statement that the British government issued the sovereign class Renminbi bonds, the first such paction carried out in western countries. The paction has been a great success and will bring monetary value to taxpayers.

The British government hopes London will become an offshore renminbi trading center.

The proceeds of the paction will be used to finance foreign exchange reserves in the UK, and the government holds it through its Exchange Equalisation Account.

Reserves include financial assets denominated in foreign currencies, gold and the special drawing rights of the International Monetary Fund (IMT).

The Ministry of Finance added that trading revenue is expected to be used to reinvest the offshore renminbi market.

Although the British government is the first to issue sovereign offshore bonds in this paction, the main underwriter of the paction can still use many reference points to determine the pricing level.

One of the comparable criteria is the world bank's private sector sector International Finance Corporation (IFC), which has issued two offshore RMB bonds. Its maturity dates are in September 2019 and January 2017, respectively, with a yield of 3% and 2.39% respectively.

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Referring to the two bonds issued by the Chinese government, their maturities are in June 2017 and June 2018 respectively, yielding 2.74% and 2.85% respectively.

The UK government's final pricing for the paction is 2.70%, equivalent to 2.75% (up to 5 basis points), the lower limit of the final guidance interval, compared with the previous initial guidance interval of 2.90%.

In addition, the deal also represents the second time the British government issued bonds in the niche bond market in the past five months, after which it issued a five year Islamic bond (sukuk) of 200 million pounds (US $320 million) in June.