Tesco has raised CNY725m (US$113m) to fund its expansion in China through the launch of an offshore Chinese Renminbi denominated bond issue in Hong Kong.

Tesco CFO Laurie McIlwee said: “China is an important market for us and represents a great growth opportunity. This is a new and innovative way of funding our business as it continues to grow and demonstrates our commitment to China.”

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The proceeds from the bond issuance, which equate to around GBP70m, is the first of its kind by an international retailer and will be used to support the growth of Tesco’s retail operations in China, the company said. The decision, it added, reflects Tesco’s “confidence in the Chinese market and strong commitment to growing a prosperous local business”.

The company said that the maturity is three years and has a semi-annual coupon of 1.75% per annum. The issue is expected to be rated ‘A-‘ by S&P.

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