China’s Credit Market Sees First Floating Rate Bond Since 2020

(Bloomberg) — A Chinese local government financing vehicle is selling the first floating rate corporate note seen in the domestic bond market in more than four years, even as interest rates in the country are at historically low levels.

Shanghai Lingang Economic Development (Group) Co. Ltd. is selling a 1 billion yuan ($140 million) floating rate note with a 20-year tenor. It’s the first floating rate note in China’s credit market since April 2020, according to Bloomberg-compiled data. The issuer is paying a certain credit spread over China’s five-year sovereign bond yield and the coupon will be reset every five years, according to the prospectus.