MNI EXCLUSIVE: China Steers Rate Lower on Virus Bonds: Traders

By Archie Zhang

     BEIJING (MNI) - China's regulators have steered domestic banks to support

policy bank special bonds issued to raise funds to help contain the coronavirus

epidemic by pushing the initial coupon lower, according to two traders contacted

by MNI.

     The off-the-book request from officials required banks to push the coupon

on the 1-year 'epidemic bonds' issued Feb. 5 by Agricultural Development Bank

(ADB) below 1.9%, both traders noted, with the rate eventually fixed at 1.8833%,

according to Wind Information.

     The Export-Import Bank of China (EXIM) sold CNY3 billion 1-year bonds on

Thursday at a coupon of 1.61%, while Development Bank of China sold CNY13.5

billion 'epidemic bonds' at 1.65%, with one of the traders saying the rates were

based on the outcome of the ADB sale. Both Exim and CDB bonds are more liquid to

trade, thus lower rates than those for ADB, the trader said.

     The yield of 10-year China Government Bond was last at 2.8650%, Wind

information showed. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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