World Bank's IFC issues 1 bln RMB bond in London

International Finance Corporation (IFC), a member of the World Bank Group, issued an RMB-denominated bond worth 1 billion yuan (approximately 162 million U.S. dollars) Tuesday in London, said IFC in its press release.

The issuance is aimed at supporting the internationalization of the Chinese currency, and it attracted investors from around the world for an order book of 3.5 billion RMB, marking the first benchmark-sized bond on the London Stock Exchange by a multilateral institution, said the IFC.

Jingdong Hua, vice president and treasurer at IFC, said, "The IFC is committed to supporting the development of China's capital markets, and the IFC's RMB bond sends a strong signal of confidence at a time of global uncertainty. The strong response from international investors indicates their support of the currency in the long term, which is particularly important as China seeks to internationalize the RMB."

The three-year bond saw a wide spread demand from institution investors, of which commercial banks took up 34 percent, central banks, fund managers and corporations accounted for 31 percent, 26 percent and nine percent, respectively, said the IFC.

In terms of geographic distribution, the majority of investors were in the Asia Pacific region, which was 46 percent, followed by investors in the Americas (39 percent) and Europe, the Middle East and North Africa (15 percent). The yield is 2 percent, and HSBC, ICBC, and JP Morgan were the lead arrangers for the bond, added the IFC.

George Osborne, chancellor of the exchequer of Britain, noted in a statement, "nearly two thirds of all RMB activity outside of greater China takes place in London and the IFC's decision to issue provides yet more evidence that the capital is the western hub for the RMB."

In a speech in Hong Kong last week, Osborne said British and Chinese governments are "in active discussions" about the appointment of an RMB clearing bank in London.

The IFC is the largest global development institution focused exclusively on the private sector. In the financial year of 2013, IFC investment climbed to an all-time high of nearly 25 billion dollars.

The IFC has previously pioneered the international issuance of RMB-denominated bonds in China's mainland (Panda bonds) and Hong Kong (Dim Sum bonds). It was also the first to set up a program to regularly issue offshore RMB-denominated discount notes.