TAIPEI - Agricultural Bank of China has applied to sell about 1 billion yuan (S$205 million) worth of yuan-denominated bonds in Taiwan, Taiwanese regulators said on Wednesday, making it the second mainland Chinese bank to enter the Taiwan offshore yuan market after China's Bank of Communications applied to sell 1.2 billion yuan worth of the bonds earlier on Wednesday.
China's Bank of Communications application was first such issue by a company from the mainland, its book runner HSBC said on Wednesday.
The Chinese bank joined global rivals such as Deutsche Bank to issue yuan bonds, or so-called "Formosa" bonds in Taiwan, highlighting Taiwan's efforts to compete with Hong Kong by establishing an offshore yuan market.
Financial ties across the Taiwan Straits have strengthened since early this year when China and Taiwan signed a yuan clearing agreement.
"It means a lot to Taiwan's goal to be an offshore yuan market... It marks a further push to get close to that goal," HSBC said in a statement.
Taiwan's financial regulators would allow mainland financial institutions to issue Formosa bonds as soon as this week, sources said earlier this week.
The bond to be issued by the Bank of Communications is in two parts. It will pay a yield of 3.4 per cent on its three-year tranche and 3.7 per cent on its five-year tranche, the statement said.