BOC sells S$619m worth of yuan-denominated bonds

SINGAPORE — The local branch of Bank of China (BOC) has sold 3 billion yuan (S$619 million) worth of bonds, in a sign of increasing appetite in the city-state for investment products denominated in the Chinese currency.

The “Lion City” bonds are the largest yuan-denominated bond issue in Singapore to date and will be listed on the Singapore Exchange, the lender said in a statement on Wednesday.

The offer was 2.96 times oversubscribed, with 52 per cent of the investors from Singapore, 25 per cent from the rest of Asia and 23 per cent from Europe, BOC said.

The Chinese bank sold two billion yuan worth of two-year bonds at a yield of 3.30 per cent, and another one billion yuan worth of five-year bonds at 4 per cent.

The notes have an ‘A’ rating from Fitch and an A1 rating from Moody’s.

Singapore, the world’s third-largest centre for foreign exchange trading, is striving to become a major offshore centre for the yuan as China steps up efforts to promote the wider use of its currency.

A recent Reuters report shows that about 18 per cent of China’s total global trade is settled in yuan compared with 2 per cent in 2010.