Agricultural Development Bank of China issues first GBA-themed green bond

On October 30th, the Agricultural Development Bank of China successfully issued offshore three-year and five-year fixed-rate RMB bonds with a total amount of 5.5 billion yuan, which will be listed on the Hong Kong Stock Exchange, the ChongWa (Macao) Financial Asset Exchange CO., Ltd (MOX), the Luxembourg Stock Exchange, the London Stock Exchange and the China Europe International Exchange.

On October 30th, the Agricultural Development Bank of China successfully issued offshore three-year and five-year fixed-rate RMB bonds with a total amount of 5.5 billion yuan, which will be listed on the Hong Kong Stock Exchange, the ChongWa (Macao) Financial Asset Exchange CO., Ltd (MOX), the Luxembourg Stock Exchange, the London Stock Exchange and the China Europe International Exchange.

The three-year RMB bond is the first green bond related to the theme Guangdong-Hong Kong-Macau Greater Bay Area (GBA) issued by a policy bank, with a size of 2.5 billion yuan and an interest rate of 3.18%, which is 9 BP (basis points) lower than the yield level of instruments with the same maturity on the same day.

The five-year RMB bonds are a rare long-term type in the offshore RMB bond market. Prior to this, only the Ministry of Finance has issued treasury bonds of the same maturity this year.

Agricultural Development Bank of China has also started the issuance of this maturity variety after seven years, with a scale of 3 billion yuan and an interest rate of 3.4%, which is 24 BP lower than the yield level of the same maturity varieties in the country on the same day.

It was originally planned that the issuance size of the two instruments would not exceed 4 billion yuan, but the peak value of the order book once exceeded 13.4 billion yuan (the subscription times of 3-year and 5-year bonds reached 3.2 and 3.5times, respectively). The Agricultural Development Bank of China has issued an additional 1.5 billion yuan on the basis of the original plan, bringing the scale up to 5.5 billion yuan.

The simultaneous issuance of these two types of offshore RMB bonds by the Agricultural Development Bank of China has not only further enriched the variety of overseas dim sum bond market, but also promoted the steady development of the offshore RMB bond market. Moreover, it has met the diversified asset allocation needs of foreign investors, and has been actively subscribed by foreign investors.

The joint global coordinators of this offering are Bank of China, Standard Chartered Bank and Bank of Communications; the joint underwriters and joint bookrunners are Bank of China, Standard Chartered Bank, Bank of Communications, Agricultural Bank of China of China (Hong Kong), Construction Bank, ICBC Asia, Pudong Development Bank, China CITIC Bank International, Mizuho Securities, KGI Securities, Credit Agricole, China Trust; and the green advisors are Credit Agricole and Bank of China (Hong Kong).

The bank’s first GBA-themed green bond was issued under the its Green and Sustainable Bond Framework, which conforms to the international green bond standards and China’s Green Bond Principles (GBP), and won the HKQAA’s Pre-Issuance Stage Certificate, becoming the first interest rate bond in China to obtain HKQAA green financial certification.

The funds raised from this bond issue will mainly be invested in the green credit projects of the Guangdong Branch of the Agricultural Development Bank of China to help environmental protection and ecological restoration in the GBA.

Disclaimer: This is an article created by Michael Liang for Chinasdg.org. You can find the original article here: https://chinasdg.org/2020/06/07/agricultural-development-bank-of-china-issues-first-gba-themed-green-bond/.

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