China has successfully attracted over $40 billion in orders for its first dollar bond offering since 2021, during a recent issuance in Saudi Arabia. This overwhelming demand was 20 times the amount of bonds available, which totaled up to $2 billion, issued in two tranches of 5 years and 3 years. The yields on these bonds are set to be at least one basis point higher than similar-dated U.S. Treasuries, indicating strong investor confidence in Chinese debt. The bonds are expected to be listed on Nasdaq Dubai and the Hong Kong Stock Exchange, further enhancing their visibility in global markets.
The decision to issue these bonds in Saudi Arabia aligns with the growing economic ties between China and the kingdom. Analysts, such as Ting Ming from Australia & New Zealand Banking Group, note that this move reflects the strengthening relations between the two nations, which have been increasingly collaborating on various economic fronts. Historically, major bond offerings have been conducted in financial hubs like London, New York, and Hong Kong, making Saudi Arabia's selection notable. This bond issuance follows China's previous euro-denominated bond sale in Paris, highlighting its strategy to diversify funding sources.
