| Issuer: People's Republic of China It is not as if the People's Republic of China (PRC) has a glittering track record in global bond issuance. Only two years ago a $1 billion 10-year global led by Merrill Lynch widened from 85 basis points at issuance to a high of 160bp in the secondary market. So it was only natural to expect investors to be sceptical when the PRC came to market again in June. As it turned out, the $700 million five-year global led this time by CS First Boston and Morgan Stanley was three times oversubscribed, setting the scene for a further $300 million 10-year issue within a matter of days. About half of the five-year bond was sold in Europe, 30% in Asia and 20% in the US. The formula was straightforward. According to one banker: "It was the easiest deal we've ever done." There aren't many China issues available and the roadshow which took place as sovereign analysts were arguing that the PRC should be rerated from A3/BBB to mid to weak A convinced investors that the Chinese economy was in good shape. |