On August 3, the Moscow Exchange began trading bonds with settlements in Chinese yuan. The new instruments are aimed at the widest range of investors using the Chinese currency and financial products denominated in it.
The first securities available to investors were two issues of 5-year Rusal (Russian aluminum company, one of the world’s largest producers of primary aluminum) bonds with a 2-year offer of 2 billion yuan each. The collection of applications for the issues took place on July 27 and 28. The first issue of BO-05 (exchange bond 05) with a volume of 2 billion yuan was met with increased demand.
“Debt instruments denominated in Chinese yuan open up an additional source of foreign currency liquidity for Russian borrowers. The first placement is very important for the market, it sets a benchmark for the rate of attraction in yuan for all other participants,” the Director of the Debt Market of the Moscow Stock Exchange, Gleb Shevelenkov, said.
As specified, the placement of local bonds denominated in Chinese currency has become especially relevant against the background of growing investor interest in operations with the yuan. According to the exchange, the average daily volume of yuan trading on the Moscow Exchange for the first half of 2022 increased 12.4 times compared to the same period last year and amounted to 45.7 billion rubles.
The Director of Corporate Finance at Rusal, Alexey Grenkov, commenting on the book building results, noted that the choice in favor of placing bonds denominated in yuan seems natural given the current situation in the financial market.