China prices its first perpetual bond

The country is actively promoting its first perpetual bonds after a failed trial earlier in the year, but the market still has reservations.
Last week, China’s interbank market saw a rate spike, with the seven-day repo rate climbing as much as 2.9% to 6.9% at one point.
Last week, China’s interbank market saw a rate spike, with the seven-day repo rate climbing as much as 2.9% to 6.9% at one point.

China is set to finally see its first onshore perpetual bonds after an initial trial failed earlier this year but hopes are slim that more will follow suit anytime soon. 

Wuhan Metro, an AA rated company by domestic ratings agency China Chengxin, closed bookbuilding for its Rmb2.3 billion $378 million corporate bond issuance on Tuesday.

A perpetual bond is a bond with no maturity date and may be treated as equity, not as debt. Issuers pay coupons on perpetual bonds forever, and they do not have to redeem the principal.

The notes can be regarded as perpetual bonds because they have no fixed...

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