HSBC Bank (China) Co doubled its minimum yuan-backed bond offering in Hong Kong due to heavy oversubscription, the bank said yesterday.
HSBC China, the local incorporation of HSBC on the mainland, received total subscriptions of more than 4.4 billion yuan (US$644 million) from retail and institutional investors, equivalent to more than four times its previously planned minimum issue of 1 billion yuan.
"The success of our yuan-denominated bond issuance illustrates that Hong Kong investors have a positive outlook towards China's economic growth," said Vincent Cheng, chairman of HSBC Bank China. "It also signifies our investors' confidence in HSBC's continued expansion in China's mainland."
The bonds attracted more than 27,500 applications from retail investors with total subscriptions at 3.1 billion yuan. The institutional tranche also got more than 1.3 billion yuan worth of orders.
The Shanghai-based bank decided to offer total bonds worth 2 billion yuan, doubling its minimum plan.
HSBC China has allocated an issue of 1.7 billion yuan for the retail tranche and 300 million yuan for the institutional tranche.
The bank will allocate at least one bond to each retail applicant. The denomination of the bonds is 10,000 yuan.
The two-year bonds bear an annual interest rate of 2.6 percent which is payable half yearly.
Net proceeds from the issuance of the bonds will be used to develop and expand HSBC on the mainland.
HSBC China launched 1 billion yuan of yuan-denominated floating rate notes for institutional investors in Hong Kong in June.
(Shanghai Daily September 8, 2009)