Chinatrust Commercial Bank has sold the first yuan-denominated bonds in Taiwan.
Chinatrust Commercial, a unit of Taipei-based Chinatrust Financial Holding Co., sold 1 billion yuan ($161 million) of three-year notes at a yield of 2.9 percent yesterday, according to a company statement to the Taiwan stock exchange. That compares with the 1.17 percent secondary-market rate on the lender’s 2.14 percent Taiwan dollar securities due May 2016.
The debut yuan sale follows an August pact on cross-strait currency clearing with China’s central bank, which allowed the island’s lenders to offer yuan deposits onshore from Feb. 6. BNP Paribas SA and Deutsche Bank AG have approached Taiwan’s Financial Supervisory Commission about possible Chinese-currency offers, according to two people familiar with the matter, who asked not to be identified because the details are private.
The bonds will start trading on the Gretai Securities Market in Taipei on March 12 and the funds raised will be used for the bank’s loan operations and to replenish mid- to long-term liquidity, according to Chinatrust’s statement. Taiwan Depository & Clearing Corp. will be responsible for payments and settlements for the notes, according to its website.
Yuan deposits at Taiwanese lenders’ domestic and offshore units rose to 33.84 billion yuan as of Feb. 22, still far below the 603 billion yuan of savings at Hong Kong banks at the end of 2012, data from their respective central banks show.