World Bank said to be planning SDR Bond sale
BEIJING — The World Bank plans to issue bonds denominated in the International Monetary Fund’s Special Drawing Rights next week, the world’s first such sale in three decades, said people familiar with the matter.
BEIJING — The World Bank plans to issue bonds denominated in the International Monetary Fund’s Special Drawing Rights next week, the world’s first such sale in three decades, said people familiar with the matter.
The notes will price on Aug 31 in China’s inter-bank market, the people said, who asked not to be identified because they’re not authorised to speak publicly.
The first batch of issuance will be a three-year security with a face value of 500 million SDR units (S$946.63 million), said one of the people.
Any new SDR-denominated bond issuance would be the first since the 1980s, according to the IMF.
The Chinese government has been promoting greater international usage of the yuan and the IMF in 2015 decided that it would form part of the SDR from Oct 1 this year. Major Chinese financial institutions expressed hopes to issue SDR bonds, Mr Yi Gang, the deputy governor at China’s central bank, said in a briefing on Aug. 15.
There was no immediate reply to questions e-mailed to the World Bank in Washington, DC, after business hours there.
In an Aug 12 statement, World Bank Group President Jim Yong Kim said the issuance will help promote the use of SDR and “increase Chinese investors’ access to foreign currencies in the domestic bond market”.
SDR bonds will help avoid foreign exchange and interest risk stemming from assets denominated in a single currency, and will diversify asset allocation for domestic and international investors, People’s Bank of China said in a statement on that same day. BLOOMBERG