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Hopewell Highway to issue yuan-denominated bonds

Hopewell Highway to issue yuan-denominated bonds

Write: Jitendra [2011-05-20]
Tags: the yuan

Hopewell Highway Infrastructure Ltd, controlled by Hong Kong billionaire Gordon Wu, will issue two- year yuan-denominated bonds as soon as July, according to two people with knowledge of the matter.

The bonds will be issued to institutional investors in Hong Kong and Bank of China (Hong Kong) Ltd is the sole arranger, the company said in a statement yesterday.

The notes will be the first yuan bonds sold offshore by a non-financial Hong Kong-based company, Hopewell Highway Infrastructure spokeswoman Sukyi Yau said by telephone. China, the world's third-largest economy, is seeking to promote the yuan as a global currency and increase its use in cross-border trade.

The sale "is part of the move to promote more international use of the yuan," Frances Cheung, a strategist at Credit Agricole CIB in Hong Kong, said in a telephone interview.

Hopewell Highway Infrastructure, which develops and operates roads, tunnels, bridges and other infrastructure projects in China's Guangdong province and the Pearl River Delta region, will meet with institutional investors from today until July 7, according to one of the people. The issue size will depend on investor response, the person said.

The funds could be used for the third phase of the company's Western Delta Route, an expressway linking Zhongshan to the coastal city of Zhuhai, according to yesterday's statement.

The planned sale "marks a milestone" for the yuan bond market in Hong Kong, He Guangbei, vice chairman and chief executive of Bank of China (Hong Kong), said in the statement. The sale helps diversify yuan bond offerings and deepens the local bond market, He said.

Yuan deposits at Hong Kong banks climbed 14 percent in April to 80.9 billion yuan ($11.9 billion), the biggest increase in a year, according to figures from the city's monetary authority.