British Columbia has become the first foreign government to sell bonds into China's domestic market, issuing just over $400 million worth of debt paying 2.25 per cent.
The government trumpeted the sale in a press release and says it will provide further details on the bond issue at a 6 p.m. Pacific standard time on Monday.
The province sold just over 2.5 billion bonds denominated in China's currency, the renminbi — which is also known as RMB or yuan — with a coupon of 2.25 per cent.
The one-year so-called "dim sum" bonds will pay out in November 2014.
B.C. has a AAA debt rating, which makes its debt attractive to international investors looking for perceived safety. While it doesn't add up to a large amount of money in the province's operating costs, it's a telling move for a province trying to ally itself more closely with the Asian market.
By issuing bonds denominated in RMB, B.C. has become the first foreign government to allow Chinese investors to loan it money in their own currency.
The RMB is becoming one of the world's more important reserve currencies — foreign money that governments hold in their coffers.
Bonds denominated in a different country's currency are quite common, and often have whimsical names such as Maple Bonds (to signal Canadian-denominated bonds of foreign entities) Yankee Bonds, Samurai Bonds, Kimchi Bonds and Kangaroo Bonds.