On October 19, 2021, China's Ministry of Finance ("MoF") completed a landmark issuance of a USD 4 billion sovereign bond. The total bond offering consists of USD 1.0 billion, with a yield of 0.772% in 3 years; USD 1.5 billion, with a yield of 1.275% in 5 years; USD 1.0 billion, with a yield of 1.860% in 10 years and USD 0.5 billion, with a yield of 2.605% in 30 years. The issuance will be listed on the Stock Exchange of Hong Kong Limited and the London Stock Exchange plc. CICC acted as the joint lead manager and joint bookrunner in this issuance.

The issuance marks the second time that China has issued in the Reg S and 144A dual-format foreign currency denominated sovereign bond since its debut dual-format issuance in 2020. It demonstrates China's economic development for the international financial markets in the first year of the state's 14th Five-year Plan, further strengthens the regular issuance mechanism of US dollar sovereign bonds, improves the pricing mechanism of China's offshore US dollar bonds and benefits other Chinese issuers to benchmark their international financing levels. Against the backdrop of the continuous opening-up of China's financial markets, this issuance provides more options for global investors to take part in the nation's economic growth and invest in high-quality financial assets. 

On the pricing day, four tranches were announced with an initial price guidance of T+35bps area, T+45bps area, T+55bps area and T+85bps area, attracting multiple orders from many high-profile international bond investors, reaching a 6-times oversubscription limit with the final order book above USD 24 billion. The final price for the 3-year tranche was tightened to T+6bps; the 5-year tranche was tightened to T+12bps; the 10-year tranche was tightened to T+23bps; and the 30-year tranche was tightened to T+53bps – achieving a record low in issue spreads across all tranches for USD sovereign bonds in China. The issue spread for the 3-year tranche fell below 10bps for the first time, and the yield approached that of US Treasuries of the same maturity. This issuance saw a diversified group of investors with an extensive geographical distribution, where there is active participation from central banks, sovereign wealth funds, insurance companies, commercial banks, mutual fund companies and asset management companies. The increasing institutional and geographic diversification of investor groups serves as a further testament to global investors' increasing recognition of Chinese sovereign credit.

CICC, as the only Chinese investment bank to participate in the deal, was honored to have been given full access and responsibilities during the preparation stage in this symbolic landmark transaction. Continuing the past sovereign bond issuances of USD 2.0 billion in 2017, the issuance of USD 3.0 billion in 2018, the issuance of EUR 4.0 billion and USD 6.0 billion in 2019, and the issuance of EUR 4.0 billion and USD 6.0 billion in 2020, this is the fifth consecutive year and the seventh time that CICC has acted as lead manager and bookrunner to serve the MoF's international sovereign bond issuances.