World Bank issues first renminbi bond

The World Bank issued its first renminbi dominated bond. The US$ 76 million-equivalent 2-year fixed rate note due on January 14, 2013, offers investors a semi-annual coupon of 0.95 per cent.

This is the first renminbi bond issuance in the Hong Kong capital markets in 2011, and the World Bank’s first RMB bond ever.

The transaction comes at a time when China’s shareholding in the World Bank is set to increase as part of the realignment of voting shares announced in April 2010. If the realignment is formally approved and subscribed as proposed, China would become the third largest shareholder in the World Bank after the US and Japan.

The entry of the World Bank into the RMB bond market in Hong Kong will further deepen the market and permit investors to diversify their currency holdings and expand their RMB exposure. The World Bank’s global reputation should also help attract the attention of many international investors who have not previously invested in RMB to this rapidly developing market.

“This is a landmark transaction for the World Bank as it is the first World Bank issuance in RMB, and signals the strong interest of the World Bank in supporting the development of the RMB market. It is a privilege for us to have this opportunity that establishes the institution as a premier issuer in the fastest growing capital market in the world,” said Doris Herrera-Pol, Global Head of Capital Markets at the World Bank.

"Hong Kong continues to take decisive steps in its development as an offshore RMB centre. With its global reach and international standing, the World Bank has provided Hong Kong with a landmark issuance and another strong endorsement of its evolving RMB bond market,” said Anita Fung, Group General Manager, Head of Global Banking and Markets, Asia-Pacific, HSBC.