The announcement by the Agricultural Bank of China of a mixed USD and CNY three tranche green bond issuance to the value of USD995 million has been welcomed by the Climate Bonds Initiative.
Initially reported in FinanceAsia the first bond is USD400 million over three years; second is USD500 million over five years; third is denoted in CNY600 million (USD95m) for two yrs. Asian investors accounted for 94 per cent of demand while the rest went to European investors. All three bonds will be listed on the London Stock Exchange for trading on the 22 October.
“This is a welcome development in the international green bond market,” says Climate Bonds CEO Sean Kidney (pictured). “The Agricultural Bank announcement reflects growing Chinese interest in green bonds as an international funding vehicle for low carbon and climate based investment.
“The oversubscription, ranging from four to nine times is a reflection of institutional investor appetite for Chinese sourced green bonds.
“In addition, the commitment by the bank outlining the end use of proceeds for the bonds will include an annual reporting process providing important transparency and disclosure to the bond issues – and setting an excellent example for future Chinese green bond issuers.”
Of note is that this is the first off-shore Renminbi denoted green bond, a ‘trial balloon’ for future CNY based green bond issuance. The PBoC has made it clear it will be very supportive of offshore CNY green bond issuance – we expect to see a lot more, which will add a very green flavour to the growing internationalisation of the Renminbi.”
Joint global coordinators were ABC International, Barclays, HSBC and JP Morgan, along with additional joint bookrunners – Bank of America Merrill Lynch, Morgan Stanley, Goldman Sachs, Standard Chartered, and Wells Fargo Securities.
Agricultural Bank of China is the China’s third largest listed lender trading on the Shanghai and Hong Kong exchanges.