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China to raise $6 bln via bond issue; U.S. investors welcome for first time -sources

By Scott Murdoch and Andrew Galbraith

HONG KONG/SHANGHAI, Oct 13 (Reuters)China is set to raise around $6 billion through an international sovereign bond sale this week in which it will allow U.S.-based institutional investors to participate for the first time, four people with direct knowledge of the matter told Reuters.

The Ministry of Finance has mandated 13 banks for the proposed multi-tranche Reg S and 144A offering, showed a mandate announcement seen by Reuters.

Reg S bonds may not be offered, sold or delivered within the United States, whereas 144A offerings are U.S. private placements for U.S. investors. China’s previous international sovereign bond sales have all been Reg S offerings.

“It’s a sign that China is continuing to want to expand its investor base,” said one of the people, referring to the U.S. offering.

While the size of the deal was not disclosed, the four sources said it would likely be around $6 billion, in line with China’s last bond sale.

The bonds will likely be sold in three, five, 10 and 30 year tranches, two of the people said. The final deal size and pricing is set for Wednesday, they said.

One of the people said the deal had seen strong feedback on Tuesday.

“Despite the U.S.-China noise, it doesn’t seem that U.S. investors care all that much,” the person said.

The people declined to be identified as they were not authorised to speak with media on the matter.

Fitch Ratings on Tuesday said it had assigned A+/Stable ratings to China’s proposed U.S. dollar bonds.

(Reporting by Scott Murdoch in Hong Kong and Andrew Galbraith in Shanghai; Editing by Christopher Cushing)

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