China launched a sale of euro-denominated sovereign bonds on Wednesday aimed at raising 4 billion euros ($4.62 billion), three weeks after the country raised $4 billion via a U.S. dollar bond sale that drew robust demand. FILE PHOTO: The Chinese national flag is seen in Beijing, China April 29, 2020. REUTERS/Thomas Peter/File Photo China’s Ministry of Finance is issuing the euro bond in three, seven and 12 year tranches, according to a term sheet seen by Reuters on Wednesday. The ministry said on Oct. 29 it will issue the debt in Hong Kong to raise 4 billion euros. Beijing has been issuing sovereign bonds offshore regularly, in a bid to integrate China more closely into the global financial system, and build a price benchmark for overseas issuance of Chinese corporate bonds. It conducted similar euro bond sales last year and in 2019, when Beijing sold its first euro-denominated government debt in 15 years. The euro bond sale comes as China’s economy is slowing amid a power crunch and surging raw material prices, while China’s dollar bond market has tumbled due to fears of contagion from China Evergrande Group’s debt problems. ADVERTISEMENT Chen Jianheng, head of fixed income research at China International Capital Corp (CICC), one of the underwriters of China’s euro bond, said Chinese sovereign bonds remain attractive to global investors. “We think China will relax its monetary policy to some extent, while the U.S. monetary policy is being tightened,” he said, adding that the narrowing yield spread between Chinese sovereign bonds and their U.S. and European counterparts means investors face less interest rate risks buying Chinese bonds. Reflecting investor enthusiasm, China’s $4 billion sovereign dollar bond issuance last month drew bids worth six times the amount on offer. The bonds were also sold at record-low spreads for such issuance, according to CICC. Initial pricing guidance for the euro-denominated bond has been set at the mid swap rate plus 20 basis points area for the 3-year deal, 40 basis points area for the 7-year, and 65 basis points area for the 12-year tranche, the term sheet showed. CICC’s Chen suggested that China should issue offshore sovereign bonds more frequently, and increase the tenors of the bonds on offer, so as to further improve the yield curve - a benchmark for Chinese companies to price their offshore issuance. ($1 = 0.8655 euros) Reporting by Scott Murdoch in Hong Kong and Samuel Shen in Shanghai; Editing by Richard Pullin and Ana Nicolaci da Costa Our Standards: The Thomson Reuters Trust Principles. MORE FROM REUTERS Sydney Airport agrees $17.5 bln takeover ADVERTISEMENT TRENDING STORIES Israel to rule on child COVID vaccines out of public eye amid anti-vax threats Fact Check-Poster advertising COVID-19 vaccines and children organ donations is digitally altered Bitcoin, ether hit all-time highs as momentum accelerates Wall Street closes up on infrastructure gains but Tesla weighs Fact Check-Kamala Harris clip saying every person in hospital with COVID-19 is vaccinated has been edited REUTERS NEWS NOW Subscribe to our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox. Enter email address Submit AppsNewslettersAdvertise with UsAdvertising GuidelinesCookiesTerms of UsePrivacy All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays. © 2021 Reuters. All Rights Reserved.