Guangdong issues RMB2.2b in offshore government bonds to Macau

The Guangdong provincial government yesterday issued its first-ever offshore municipal government bonds to the Macau market.

Institutional investors are offered some RMB2.2 billion in bonds with a term of three years and an interest rate of 2.68%.

The initiative aims to provide local and foreign institutional investors with more investment options, as well as opportunities to participate in the economic development of Guangdong province, the Monetary Authority of Macao (AMCM) said in a statement.

This bond issuance attracted local and foreign institutional investors from the mainland, Hong Kong, Taiwan, Brazil, Australia and Japan.

It was also the first time that any mainland municipal government bond has been issued in Macau.

The issuing of the provincial bond comes against the backdrop of integrated development in the Guangdong-Hong Kong-Macau Greater Bay Area, and is considered another milestone in the development of Macau’s bond market as well as in cross-border financial cooperation.

Depending on the outcomes from this bond issue, more could be done in the future to broaden the scope of the local bond market, such as enlarging the range of financial products in RMB available in Macau’s offshore market, while also eyeing the internationalization of the RMB.