The Guangdong provincial government has carried out the first offshore municipal government bonds issuance in the SAR, some RMB2.2 billion (MOP2.7 billion/US$341.2 million) in bonds with a 3-year maturity rate.
According to the Chongwa (Macao) Financial Asset Exchange Co., Ltd. (MOX), the issuance had a 2.8 per cent senior fixed rate and it was over-subscribed by nearlly 3 times by local and overseas institutional investors, including the mainland, Hong Kong, Taiwan, Brazil, Australia and Japan.
Bank of China Macau Branch, the global coordinator of the Guangdong offshore RMB local government bond issuance, stated that the total size of the final order book for the issuance exceeded RMB 7.4 billion.
Guangdong authorities have indicated the funds raised will be used to develop education, science and technology, agriculture and other fields in the province.
The SAR government stated that Guangdong’s bonds issuance in Macau will help ‘increase the breadth and depth’ of the local bond market and ‘lay a solid foundation’ for the steady development of the Macau bond market.
Meanwhile, MOX considered that the issuance will ‘broaden the scope of the local bonds market’ and promote the internationalization of the RMB.
The SAR’s first financial institution to provide services of bond issuance, listing, registration, custody, trading and settlement, MOX was established in December 2018, with the development of the financial industry earmarked by local authorities as one of the main avenues for the economic diversification of the SAR.