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Report: China set for October launch of 1st dollar bond since 2004

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Report: China set for October launch of 1st dollar bond since 2004

China aims to issue its first dollar-denominated bonds since 2004 as early as October, Bloomberg News reported Oct. 11, citing "people familiar with the plans."

Officials from the country's Ministry of Finance are expected to meet with bankers in Beijing Oct. 11 to discuss the sale.

The finance ministry said it will sell $2 billion worth of notes, consisting of $1 billion of five-year notes and $1 billion of 10-year notes, Bloomberg reported, citing a Chinese-language statement.

Market players see the $2-billion issue as a move to reduce the borrowing costs of Chinese state-owned enterprises in the energy and transport sectors, which need to tap the dollar bond market for their foreign operations. Expansion ventures under President Xi Jinping's flagship Silk Road development project would also need the funding source, said a Sept. 15 Bloomberg report.

China has yet to specify which rules will govern its sovereign issue, but officials said the bonds will be listed on the Hong Kong stock exchange.

The meeting comes less than a month after S&P Global Ratings cut China's credit rating by one notch. In May, Moody's did the same. Both agencies had flagged concerns over China's continuing buildup of debt at the corporate and local authority level.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.