OREANDA-NEWS. October 20, 2014. The UK GOVERNMENT acting through Her Majesty’s Treasury has mandated Bank of China, the only Chinese bank in the syndicate, together with HSBC and Standard Chartered as Joint Lead Managers for a benchmark size offshore Renminbi bond transaction following a fair and rigorous process.

The bond will be issued in due course subject to market conditions. Representatives of HM Treasury and the Bank of England, acting as agent for HM Treasury on this bond issue, will hold a meeting with fixed income investors in London on 13 October 2014, arranged by the Joint Lead Managers. This would be the world’s first non-Chinese sovereign offshore Renminbi bond.

This issue is seen as part of the conclusion of the UK-China Economic and Financial Dialogue held on September 12th in London co-held by Chinese Vice Premier Ma Kai and UK Chancellor of the Exchequer George Osborne. The proceeds are to contribute liquidity to the Renminbi offshore market, and add to the UK government’s reserves of foreign currency. Currently, Britain only holds reserves in US dollars, euros, yen and Canadian dollars, so a British Renminbi sovereign bond signals the Renminbi’s potential as a future reserve currency. The Chancellor stated that:” It’s another step in cementing Britain’s position as the centre of global finance.”

Bank of China set up office in London in 1929. This was not only the first branch of the Bank to be set up overseas, but was also the first overseas financial institution formed by any Chinese bank. Bank of China is the most internationalised and diversified bank in China. Bank of China has always been dedicated to promoting the development of the Renminbi market in the UK, and maintains a leading edge in capital markets, trade finance, deposits, and other related financial services.