UPDATE 1-China to issue 1 trillion yuan of ultra-long treasury bonds from May 17, sources say

(Adds more details on sale)

SHANGHAI, May 13 (Reuters) – China will start selling 1 trillion yuan ($138.23 billion) worth of long-term treasury bonds this week to support the economy, sources told Reuters on Monday.

The bulk of the special government bonds have tenors beyond 30 years, four sources with direct knowledge of the plans said.

The sources said there would be 300 billion yuan ($41.47 billion) worth of 20-year bonds, 600 billion yuan worth of 30-year bonds and 100 billion worth of 50-year bonds which would be issued from May 17.

Issuance plans for the special treasury bonds, which were first announced during China’s parliamentary conference in March, are being closely monitored by market participants.

Proceeds will support the rebuilding of disaster-hit areas in the country and improve urban drainage prevention infrastructure to boost China’s ability to withstand natural disasters, state media have said.

The Financial Times reported earlier in the day that Chinese authorities had kicked off plans to sell the long-dated bonds and the People’s Bank of China (PBOC) had asked brokers for advice on pricing.

Data on Saturday showed China’s broader credit growth slowed to

a record low

last month, raising the prospect of more action to support the economy.

($1 = 7.2341 Chinese yuan renminbi) (Reporting by China newsroom; Editing by Kim Coghill)

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