BANK of China Ltd will start selling yuan bonds in Hong Kong today, becoming the first Chinese mainland commercial bank to issue yuan bonds in the special administrative region, the lender said yesterday.
The country's biggest foreign currency bank will sell bonds worth three billion yuan (US$400 million) in Hong Kong, the Beijing-based bank said yesterday on its Website.
The sale will end next Friday.
The lender will sell two-year bonds at a coupon rate of 3.15 percent and three-year bonds at 3.35-percent rate starting today. Interest will be paid on a half-yearly basis.
The bonds will be sold through the branches of 17 banks in Hong Kong, including HSBC, Hang Seng and Bank of East Asia.
The yuan bonds offer investors in HK another option to ride on the growing economy of the Chinese mainland and the appreciation of the yuan.
The Chinese yuan has climbed about 10 percent in the past year against the Hong Kong dollar, which is pegged to the US dollar, making it more attractive for HK investors to hold yuan-backed assets.
Authorities gave the green light this year to mainland financial institutions to issue Chinese currency bonds in Hong Kong.
The bond, the third Chinese offshore yuan bond, will offer a higher yield than the previous two issues from China Development Bank and Export-Import Bank of China.