Crédit Agricole CIB supports China’s Ministry of Finance in issuing EUR sovereign bonds at historically tight credit spreads

The Ministry of Finance of the People’s Republic of China (MoF) successfully issued EUR 4 billion of sovereign bonds in Luxembourg on 18 November. The offering comprised a EUR 2 billion 4-year tranche priced at MS+5 basis points and a EUR 2 billion 7-year tranche priced at MS+13 basis points. Following the historically tight credit spread achieved in China’s USD sovereign bonds issuance earlier this month, this transaction once again set a record for its EUR credit spreads.

International capital markets have once more focused their attention on China. The transaction attracted strong demand with subscriptions from 1,019 investors. The investor base was large, geographically broad and highly diversified, with European investors accounting for more than 50% of total demand, while central banks, sovereign wealth funds and public institutions contributed 26%. Amid overwhelming demand, the peak order book volume exceeded EUR 104.5 billion. The final oversubscription ratios reached 23.5 times and 26.5 times for the 4- and 7-year tranches respectively.

This year, the MoF has issued sovereign bonds in CNH, USD and EUR, providing the market with diversified high-quality assets. These efforts have helped further develop China’s sovereign credit curve, effectively enhancing the liquidity of its bonds, and strengthening its linkage with global financial markets.

Crédit Agricole CIB acted as joint lead manager and joint bookrunner on this transaction, marking its 12th consecutive participation in the MoF’s international bond issuances since 2018.