China looks to raise 5 billion yuan in offshore yuan bond deal?

China is looking to raise 5 billion yuan ($701.20 million) in a dual-tranche offshore yuan sovereign bond deal, according to two sources with direct knowledge of the matter. The bonds will be issued in two and five-year tranches if the deal goes ahead, the term sheet said.

The sources could not be named discussing confidential information. The net proceeds would be used by the Ministry of Finance for general government purposes, according to the term sheet.

China's Ministry of Finance did not respond to a request for comment from Reuters. The bonds will be listed in Macau and the deal is expected to be finalised on Wednesday, the term sheet showed. The initial price guidance has been set at around 2.25% for the two-year bond and 2.45% for the longer-dated bond, according to the term sheet.

China is considering approving next week the issuance of over 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its economy, Reuters reported Tuesday citing two sources. The issue will be considered at the Standing Committee of the National People's Congress (NPC) to be held Nov. 4-8, Reuters reported.

The prospect of a major new fiscal stimulus package has helped mainland China and Hong Kong's financial markets rally in recent week but investors have been keen for specific details on the new measures. China's economy has been hard hit by an ongoing real estate crisis and growing debt levels in local governments.

The nation's economic growth in the third quarter of 2024 was at the slowest pace since early 2023, official data showed, which economists said highlighted the need for a new fiscal stimulus to promote growth. China's central bank in September released the most aggressive monetary support measures since the COVID-19 pandemic to help its economy.