China issues 4-bln-euro sovereign bonds in Luxembourg

China’s Ministry of Finance announced on Wednesday that it has successfully issued euro-denominated sovereign bonds worth four billion euros (about 4.61 billion U.S. dollars) in Luxembourg on Tuesday.

Of the total, the issuance of four-year bonds stood at two billion euros in value with a yield of 2.401 percent, and the issuance of seven-year bonds totaled two billion euros with a yield of 2.702 percent, the ministry said in a statement on its website.

This marks the first time that China had issued euro-denominated sovereign bonds in Luxembourg, said the ministry.

The bonds were warmly received by the market, with international investors subscribing enthusiastically. Total subscription reached 100.1 billion euros, 25 times the issuance amount.

The investor base was diversified in both geography and type, according to the statement.

By region, European and Asian investors accounted for 51 percent and 35 percent of total subscription, while Middle Eastern and offshore U.S. investors accounted for eight percent and six percent, respectively.

By investor type, sovereign institutions accounted for 26 percent of the investor base, while funds and asset management institutions, banking and insurance institutions, and dealers represented 39 percent, 32 percent and 3 percent, respectively.

The ministry said the bonds are fully deposited with the Central Moneymarkets Unit of the Hong Kong Monetary Authority and will subsequently be listed on the Hong Kong Stock Exchange and the Luxembourg Stock Exchange.

China’s commerce ministry said Wednesday that the country welcomes the Dutch government’s move to suspend its administrative order regarding semiconductor manufacturer Nexperia, an overseas subsidiary of Chinese company Wingtech.

It is “a first step in the right direction toward a proper settlement of the issue,” said a spokesperson with the ministry.

Government officials of the two countries held two rounds of consultations in Beijing regarding the Nexperia issue on Tuesday and Wednesday, during which the Dutch side offered to suspend the administrative order issued under the “Availability of Goods Act,” according to the ministry.

However, the suspension falls short of revoking the administrative order, a move that would address the root cause of the turbulence and chaos in the global semiconductor industrial and supply chains, the spokesperson noted.

Meanwhile, the erroneous ruling, pushed by the Dutch Ministry of Economic Affairs, to strip Wingtech of its control over Nexperia remains the key obstacle to resolving the issue, the spokesperson added.

The source and responsibility for the current disruption in the global semiconductor supply chain lie with the Netherlands, the Chinese side has reiterated during the consultations.

China hopes the Dutch side will continue to demonstrate sincerity in cooperating with China and put forward genuinely constructive proposals to solve the problem, said the spokesperson.

Both sides have agreed to eliminate administrative intervention and support enterprises in resolving internal disputes through consultation in accordance with the law, which will not only protect investors’ legitimate rights but also create better conditions for restoring security and stability of the global semiconductor industry, according to the spokesperson.

On Wednesday, Dutch Minister of Economic Affairs Vincent Karremans said that the government’s intervention over semiconductor manufacturer Nexperia is being suspended.

“In light of recent developments, I consider it the right moment to take a constructive step by suspending my order under the Goods Availability Act regarding Nexperia, in close consultation with our European and international partners,” The minister said in a statement.

Karremans intervened in the operations of Nexperia in late September, citing the company’s alleged governance shortcomings.

China’s Ministry of Commerce said on Nov 1 that the Dutch government’s improper interference in internal corporate affairs has led to the ongoing chaos in global industrial and supply chains. China urges the Netherlands to take concrete actions to restore the stability of the global semiconductor supply chain.

Karremans said in the past few days Dutch government has had constructive meetings with the Chinese authorities. He lauded the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world.