HONG KONG Feb 26 The International Finance
Corporation, an arm of the World Bank, issued its first
yuan-denominated discount note in the offshore yuan market (CNH)
on Tuesday, in a move that will further support China's efforts
to internationalize its currency.
The size of the offshore yuan bond is equivalent to about
$50 million with a three-month maturity.
"The IFC discount note program introduces a new asset class
for investors seeking high-quality credit, and short-term
financing alternatives in the CNH market," said IFC's Treasurer
Jingdong Hua in a statement.
A discount note is a short-term debt issued at a discount to
par value. Discount notes have maturities of up to one year and
are typically issued by government-sponsored agencies or highly
rated corporate borrowers.
Standard Chartered Bank is the sole
arranger for IFC's Global Discount Note Program including the
yuan bond issue.
China has been actively promoting its currency to global
investors, in a bid to reduce reliance on the U.S. dollar and
lift the status of the "redback" to match its position as the
world's No.2 economy.
The process has picked up this year, with Taiwan and
Singapore each granted a yuan clearing bank. Bank of England is
also in talks with China's central bank to establish a
reciprocal three-year renminbi/sterling currency swap agreement.
The offshore yuan bond market has grown rapidly since the
first dim sum bond was issued in July 2007. Total issuance
volume amounted to 29 billion yuan ($4.65 billion) year to date,
according to Thomson Reuters statistics.
The IFC tapped China's onshore bond market as early as in
2005, when it became the first issuer of Panda bonds,
yuan-denominated bonds raised in mainland China by a non-Chinese
($1 = 6.2339 Chinese yuan)
(Reporting by Michelle Chen; Editing by Sanjeev Miglani)