China Dev Bank 7-yr bond yield at low end of f'casts

SHANGHAI, April 29 (Reuters) - China Development Bank auctioned 20 billion yuan ($2.9 billion) of seven-year fixed-rate bonds on Thursday at a yield of 3.35 percent, traders said, near the bottom of a forecast range.

Market forecasts had centred around 3.39 percent and ranged from 3.34 to 3.45 percent.

The result was well below Wednesday's indicative secondary market yield of 3.5364 percent bid for seven-year financial bonds issued by policy banks, according to Reuters Reference Rates.

CDB also auctioned 20 billion yuan of seven-year floating-rate bonds at a coupon of 33 basis points over the one-year fixed deposit rate, within market forecasts that centred around 32 bps and ranged between 30 and 35 bps.

Traders had expected strong demand for the fixed-rate issue because of easing concerns over inflation risks and monetary policy tightening, due to the euro zone's debt woes and after Chinese government measures to cool the red-hot property sector.

In contrast, doubts over the economic recovery were seen slightly undermining demand for the floaters.

($1=6.824 Yuan)

(Reporting by Steven Bian and Karen Yeung; Editing by Edmund Klamann)

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