(Bloomberg) -- China is planning to sell euro-denominated bonds amid a slump in borrowing costs in the currency, in what could mark its first such issuance since 2004.
China’s Ministry of Finance is planning to sell U.S. dollar and euro-denominated bonds, according to people familiar with the matter. The ministry didn’t immediately reply to a fax sent by Bloomberg seeking comment. China last sold euro-denominated bonds in 2004, according to Bloomberg data.
China’s return for a euro-denominated bond comes amid ultra-low borrowing costs in the currency. Average yields on investment-grade euro bonds are below 0.5%, close to a record low level of 0.23% hit in late August, according to a Bloomberg Barclays Index.
“The MOF has seized the perfect timing to sell euro bonds this year as borrowing cost in euro has become very favorable,” said Xia Le, Hong Kong-based chief Asia economist at Banco Bilbao Vizcaya Argentaria SA. “With the European Central Bank expected to maintain loose monetary policy, funding cost in the currency will stay at record low in near-term.”
The sovereign returned to the dollar bond market two years ago, after a gap of about 13 years. It also sold dollar bonds in October last year.
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