That all adds to signs of strong demand that stood out throughout the debt sale process, at a time when credit markets have been hot. Traders said part of the strength stems from demand from Chinese investors, who have been hunting for higher returns globally as local rates grind lower. Bids for the US$2 billion deal came to about US$40 billion, 20 times what was on offer, according to a person familiar with the matter.
China just borrowed dollars in global credit markets at essentially the same cost as the US, and traders immediately drove the yields on the bonds down even further.
The nation raised US$2 billion ($2.68 billion) in a sale of three- and five-year notes. The securities were priced to yield just one and three basis points over similar-maturity Treasuries, respectively. Then once trading kicked off Thursday, spreads tightened to about 24 and 25 basis points under Treasuries, traders said.
