The Ministry of Finance issued sovereign bonds worth five billion yuan in Macau yesterday, according to a statement by the Macau Monetary Authority (AMCM).
The statement pointed out that yesterday’s issuance was the third time that the central government has issued sovereign bonds in Macau, after the first and second ones in July 2019 and September last year.
According to the statement, the renminbi-denominated sovereign bonds issued in Macau yesterday comprised two-year-maturity bonds worth four billion yuan with an interest rate of 2.4 percent and five-year-maturity bonds worth one billion yuan with an interest rate of 2.68 percent.
“Renminbi” (“people’s currency”) is the official name of the nation’s legal tender, informally known as “yuan”.
In the statement, the Macau Monetary Authority expressed its gratitude for the Finance Ministry’s support in developing modern finance in Macau.
The statement noted that it is the first time that the central government has issued sovereign bonds with a five-year maturity in Macau, which the statement said has “filled the shortage” of medium-term and long-term sovereign bonds in Macau’s bond market.
The Ministry of Finance issued sovereign bonds worth two billion yuan in the Macau Special Administrative Region (MSAR) in 2019, while bonds worth three billion yuan were issued here last year.
The two-billion-yuan sovereign bonds issued in Macau in 2019 comprised three-year-maturity bonds worth 1.7 billion yuan with an interest rate of 3.05 percent offered to institutional investors, and two-year-maturity retail bonds worth 300 million yuan with an interest rate of 3.3 percent offered to members of Macau’s general public.
The three-billion-yuan sovereign bonds issued in Macau last year comprised two-year-maturity bonds worth two billion yuan with an interest rate of 2.2 percent and three-year-maturity bonds worth one billion yuan with an interest rate of 2.28 percent. The bonds issued last year were only offered to professional investors.
The same as last year, the sovereign bonds issued in Macau this year are also only available to professional investors, according to yesterday’s statement.
Yesterday’s AMCM statement also said the sovereign bonds issued this time were oversubscribed as they were well-received by investors in the market.
The statement also pointed out that the Ministry of Finance has now cumulatively issued sovereign bonds in Macau worth a total of 10 billion yuan, with an increased issuance size every time.
The statement said that the central government’s continuous issuance of sovereign bonds in Macau will contribute to the gradual formation of a yield curve in Macau’s financial market that can provide a pricing benchmark for offshore renminbi products, because of which this will promote the development of an offshore renminbi market in Macau.
According to a Xinhua report last night, the local branch of the Bank of China (BOC), the lead underwriter of the issuance, said the move had attracted wide attention in domestic and overseas markets, with subscriptions exceeding 10 billion yuan in total.
Xinhua also said that the ministry’s issuing of yuan-denominated bonds in Macau worth 10 billion yuan so far was expected to advance the development of Macau’s bond market and support the development of the offshore renminbi market.
This poster provided by the Macau Monetary Authority (AMCM) explains the Finance Ministry’s third issuing of renminbi-denominated bonds in Macau yesterday.
