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. 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. 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.