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China set to sell its first negative-yielding government bond worth $887 mn The three-part deal also consisted of a 2 billion euro 10-year bond priced at 55 bps over the mid-swap rate
BEIJING/LONDON (Reuters) - China was set to sell its first negative-yielding government bond on Wednesday, becoming the latest to benefit from this year's plunge in interest rates in the COVID-19 pandemic. Beijing was poised to sell a 750 million euro ($887.93 million) 5-year bond that, at 30 basis points (bps) above the so-called mid-swap rate of -0.45%, effectively offered investors a -0.15% interest rate.
The three-part deal also consisted of a 2 billion euro 10-year bond priced at 55 bps over the mid-swap rate and a 1.25 billion euro 15year issue priced at 70 bps over the mid-swap rate, according to a document from a lead manager of the deal. "Negative yields are part of an overall global trend now," said Daniel Moreno, head of emerging markets debt at Mirabaud, adding there was now roughly $17 trillion worth of sub-zero debt globally. "I think we are going to see much more of this". Global interest rates have been pushed to record lows by the coronavirus crisis. Nearly all short- and medium-term euro zone government debt now carry negative rates, meaning investors effectively pay to hold it...Read More