China Completes Bond Sale to Fund Reserves-Management Company

China's finance ministry sold 26.35 billion yuan ($3.6 billion) of 10-year notes, completing this year's so-called special bond issue to raise money for the country's sovereign wealth fund.

The debt was sold at a yield of 4.41 percent, according to traders at China Construction Bank Corp. and the Agricultural Bank of China, primary dealers obliged to bid at government bond sales. The coupon compares with the 4.49 percent in a sale of similar-maturity debt last month.

China's lawmakers approved a plan in June to sell the bonds to finance China Investment Corp., which was officially set up in September to help manage and boost returns on the country's $1.46 trillion of currency reserves.

The government has now sold about 200 billion yuan of 10- and 15-year debt to interbank market dealers and 1.35 trillion yuan to the central bank, completing a 1.55 trillion yuan debt sale approved by the nation's lawmakers in June. The bonds were sold at par value for 100 yuan face amount and dealers bid on the coupon rate.

The People's Bank of China has used the treasuries it holds to help control money supply through its open market operations, after inflation reached the fastest in almost 11 years.

China's local currency bonds have slumped 2.41 percent this year, the worst performers among 10 Asian local-currency debt indexes compiled by HSBC Holdings Plc.