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China Raises $ 6 Billion Through Bonds

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Gravitas: Chinese State-owned enterprises default on $6.1 billion worth of bonds Description video: China says its economy is back on track. But, Chinese state-owned companies can’t keep up with their EMIs. According to Fitch Ratings, China’s state-owned firms defaulted on […]

Gravitas: Chinese State-owned enterprises default on $6.1 billion worth of bonds

Description video:
China says its economy is back on track. But, Chinese state-owned companies can’t keep up with their EMIs. According to Fitch Ratings, China’s state-owned firms defaulted on a record $6.1 billion worth of bonds between January and October.\n\n#Gravitas #ChinaEconomy #ChinaGDP\n\nAbout Channel: \n\nWION -The World is One News, examines global issues with in-depth analysis. We provide much more than the news of the day. Our aim to empower people to explore their world. With our Global headquarters in New Delhi, we bring you news on the hour, by the hour. We deliver information that is not biased. We are journalists who are neutral to the core and non-partisan when it comes to the politics of the world. People are tired of biased reportage and we stand for a globalised united world. So for us the World is truly One.\n \nPlease keep discussions on this channel clean and respectful and refrain from using racist or sexist slurs as well as personal insults.\n\nSubscribe to our channel at https://goo.gl/JfY3NI\nCheck out our website: http://www.wionews.com\nConnect with us on our social media handles:\nFacebook: https://www.facebook.com/WIONews\nTwitter: https://twitter.com/WIONews\n\nFollow us on Google News for latest updates\n\nZee News:- https://bit.ly/2Ac5G60\nZee Bussiness:- https://bit.ly/36vI2xa\nDNA India:- https://bit.ly/2ZDuLRY\nWION: https://bit.ly/3gnDb5J\nZee News Apps : https://bit.ly/ZeeNewsApps

China Raises $ 6 Billion Through Bonds

China raised $ 6 billion on Tuesday in the largest international sovereign bond offering in history as it faced a sharp drop in borrowing costs this year.

The Ministry of Finance has placed the bonds in four tranches. The three-year issue sold at 35 basis points above the benchmark for US Treasuries, a source at an investment bank told Reuters. According to him, the 5-year bonds were sold by 40 bp. higher Treasuries, 10-year-olds – by 50 bp. higher than Treasuries, and the 20-year tranche – by 70 bp. above Treasuries.

The deal came after a market rally this year that caused a sharp decline in global bond yields, which significantly lowered funding costs.

The total of $ 6 billion was roughly double the initial demand for bonds, according to IFR Refinitiv’s Capital Markets Information Service..

China’s finance ministry has indicated that the move will help improve the bond’s yield curve. it «will provide a price benchmark for Chinese enterprises issuing USD bonds», said in a message from the Bank of China posted on its website on Tuesday.

China Raises $ 6 Billion Through Bonds

Earlier this month, China also floated its first Eurobonds in 15 years, raising $ 4.4 billion, and analysts believe European markets will be a more significant source of funds for the Asian giant going forward..

All bonds offered buyers a yield of 2 to 3%. 10-year US Treasury bonds floated on Tuesday posted 1.75%, according to Refinitiv data, nearly 150 basis points below their highs in October last year.

«From a tactical funding point of view, now is the best time to get relatively inexpensive funding.», – said Alex Kozhemyakin, Head of Emerging Markets Debt at Macquarie Asset Management in New York.