China raises US$6b as US investors buy bonds

China has raised US$6 billion in a dollar bond issue that was offered to United States investors for the first time just weeks before the November 3 election, a term-sheet showed.

The deal, the fifth foreign currency denominated bond since China reinstated its offshore debt sales program in 2017, attracted US$27.2 billion in orders, it showed.

China has issued four dollar bonds and one euro bond in the past three years.

The debt was priced at 25 basis points above US Treasuries for the US$1.25-billion three-year tranche, 30 basis points for the US$2.25-billion 5-year tranche, 50 basis points for the US$2-billion 10-year tranche and 80 basis points for the US$500-million 30-year tranche.

“The successful issuance of the US sovereign bonds has helped establish and improve a yield benchmark of more market significance for Chinese issuers,” China’s finance ministry said in a statement.

It was the first time China has offered debt to US-based investors who were most active in the longer-dated tranches of the transaction.

US investors, primarily fund managers, were the largest buyers of the 30-year tranche, picking up 47 percent of the US$500 million sold, according to the term-sheet.

The rising tensions between Washington and Beijing did not deter US-based investors from participating in the deal, according to one person with direct knowledge of the matter.

The person could not be named because he was not authorized to speak to media.

“We did not see the geopolitical situation scaring people away,” he said.

The deal was finalized on Wednesday as the stand-off between Washington and Beijing showed no signs of easing.

The US State Department has submitted a proposal for the Trump administration to add China’s Ant Group to a trade blacklist, according to two people familiar with the matter, before the financial technology firm is slated to go public in Shanghai and Hong Kong.