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Bank of China's Singapore bond issue attracts strong interest

Bank of China's Singapore branch has successfully sold RMB 3 billion (S$619 million) worth of yuan-denominated bonds, in a sign of increasing appetite in the city-state for investment products denominated in the Chinese currency.

SINGAPORE: Bank of China's Singapore branch has successfully sold RMB 3 billion (S$619 million) worth of yuan-denominated bonds, in a sign of increasing appetite in the city-state for investment products denominated in the Chinese currency.

Bank of China's inaugural "Lion City" bond is the largest yuan-denominated bond issued in Singapore to date, the Chinese bank said in a statement on Wednesday.

Bank of China (BOC) sold RMB 2 billion worth of two-year bonds at a yield of 3.30 per cent, and another RMB 1 billion worth of five-year bonds at four per cent. The bonds will be listed on the Singapore Exchange.

The BOC issue, which has an 'A' rating from Fitch and an A1 rating from Moody's, was 2.96 times oversubscribed.

Singapore, the world third largest centre for foreign exchange trading, is striving to become a major offshore centre for the yuan as China steps up efforts to promote the wider use of its currency.

According to a recent Reuters report, about 18 per cent of China's total global trade is settled in yuan compared with two per cent in 2010.

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