Bank of China's (BOC) Singapore branch on Wednesday issued 3 billion yuan of bonds, becoming the second mainland bank to tap Singapore's fledgling yuan debt market.
BOC's so-called 'Lion City' bonds are the largest-ever yuan-denominated bond issue in the Republic and will be listed on the Singapore Exchange.
They consist of two tranches: 2 billion yuan of two-year bonds with a coupon of 3.3 per cent, and 1 billiion yuan of five-year debt paying 4 per cent.
The issuance was 2.96 times oversubscribed, said BOC, adding that 52 per cent of the investors are from Singapore, 25 per cent from the rest of Asia and 23 per cent from Europe.
BOC, DBS Bank, OCBC Bank Singapore and Standard Chartered Bank were joint book runners, with the Agricultural Bank of China Singapore Branch as co-manager.
"Bank of China's 'Lion City' issuance reflects the continued internationalisation of the renminbi as a leading currency and Singapore's increasing maturity as an offshore renminbi centre," said BOC Singapore general manager Zhang Qingsong in a statement.
"This issuance demonstrates BOC's continued support for Singapore's rapid development as an offshore renminbi centre."
BOC Singapore branch has a Qualifying Full Bank license and provides a wide range of services including deposit and loan banking, commodity financing, wealth management and credit cards.
The yuan internationalisation process continues to accelerate, said BOC's statement, citing a Cross-border Renminbi Index created by the bank.
Last November, the Industrial and Commercial Bank of China (ICBC) sold two billion yuan worth of bonds here - the first Chinese bank to issue yuan bonds in Singapore.
Singapore is aspiring to be an offshore yuan hub, alongside other cities like London.
The Monetary Authority of Singapore last month said it is inviting applications for the Renminbi Qualified Foreign Institutional Investor (RQFII) licence, which will also allow banks to offer yuan-denominated investment products to their clients.