China bank to sell yuan bonds first in South Korea in non-resident capacity

The Industrial and Commercial Bank of China (ICBC), the country's largest bank, plans to sell the Chinese yuan-denominated bonds in South Korea Tuesday for the first time in a non-resident capacity, the bank's Seoul branch said Monday.
ICBC Asia, the bank's Hong Kong branch, will issue the two-year Chinese currency bonds worth 180 million yuan (about 31.3 billion won or 29.2 million U.S. dollars) here on Oct. 14 at a coupon rate of 3.7 percent.
The Chinese bank would become the first foreign lender to float yuan bonds here in the capacity of non-resident.
"It has a significant meaning as a non-resident sells yuan bonds for the first time," an official at the South Korean finance ministry said over the phone, noting that the ministry is paying much attention to the issuance.
The official said Seoul is mulling various tools to induce foreign players to sell yuan bonds here, adding that yuan debt sales are anticipated to keep increasing over time.
The ICBC plan came after Chinese President Xi Jinping and his South Korean counterpart Park Geun-hye agreed during their July summit meeting in Seoul to boost yuan debt sales in South Korea.
Woori Bank, one of South Korea's leading banks, issued 200 million yuan of the two-year Chinese currency bonds in South Korea on Oct. 10, the first issuance by local players.
The bond's coupon rate was 3.87 percent, higher than the ICBC rate of 3.7 percent. It means the ICBC would pay less borrowing costs.
The ICBC named KDB Daewoo Securities as an arranger for the yuan bond issuance, and it will serve as a clearing bank for the sale.