China to offer 5 billion yuan in bonds to Macau

China is scheduled to release five billion yuan in bonds to Macau on September 20. China seeks to diversify Macau’s economy and generate additional revenue streams, as the gaming industry presently accounts for more than half of the territory’s GDP.

Macau’s gaming revenue increased by an extraordinary 686 percent year-over-year in August, reaching MOP 17.21 billion ($2.14 billion).

These sovereign bonds, assessed at 5 billion yuan (approximately $685 million), mark the Chinese government’s third issuance of offshore bonds to Macau. Previously, China had issued Macau bonds worth 2 billion yuan in 2019 and 3 billion yuan in 2022.

In addition to economic diversification objectives, the issuance of these bonds aims to promote the use of the yuan in Macau, as a replacement for the Macanese Pataca (MOP). The bonds will be accessible beginning on September 20.

This action will enhance financial cooperation between mainland China and Macau, offering investors secure and stable investment opportunities, according to a government statement.

Director of the Hong Kong Securities Association, Gordon Tsui Luen-on, emphasized that the issuance of yuan bonds in Macau demonstrates the central government’s dedication to supporting Macau’s economic diversification efforts and reducing reliance on the casino industry. It is also part of China’s strategy to internationalize the yuan to offer global investors more offshore yuan bonds. These bonds are likely to appeal to institutional investors seeking to increase their holdings of yuan-denominated assets.

Original story by: Gambling Insider