Linklaters, King & Wood, Clifford Chance and Jun He Law Offices have ushered in the issue of the first RMB-denominated bond that is listed at the Hong Kong Stock Exchange.
The RMB 3 billion dim sum bond ($480 million) issued by the Agricultural Development Bank of China (ADBC) in Hong Kong was priced on Jan.10, and is expected to roll out on Jan.17.
ADBC’s inaugural issuance will mark the first dim sum bond offering in Hong Kong this year, after the once-red hot papers cooled down last fall when the valuation of the yuan started fluctuating and was no longer appreciating against the greenback.
The PRC policy bank’s notes are aimed at institutional investors. They will mature in two, three and five years, and are priced at coupon rates of 3 percent, 3.20 percent and 3.50 percent respectively.
The issuer engaged Linklaters and King & Wood for Hong Kong and PRC law advisories respectively.
The transaction was underwritten by the Bank of China and Standard Chartered Bank, which retained Clifford Chance and Jun He Law Offices as their Hong Kong and PRC counsels respectively.
While Linklaters’ team was led by partner William Liu, King & Wood’s team was headed by Shanghai-based partner Zhao Xiaohong.
The Clifford Chance team was led by capital markets partner Connie Heng, and assisted by senior associate Angela Chan and associate Lin Li.
Clifford Chance’s Heng said: “This deal marks several firsts: the first RMB bond issuance in Hong Kong this year, the first offshore bond issuance for the bank, and the first RMB bond issuance by a PRC policy bank to be listed on the Hong Kong Stock Exchange. The NDRC has approved other PRC institutions to issue RMB bonds in Hong Kong which will help to maintain the momentum of the dim sum bond market.”
Meanwhile, King & Wood’s Zhao believes this issue will herald the advent of more PRC financial institutions tapping into the offshore yuan debt market. “Financial institutions still have to meet strict legal and financial requirements set by the PRC government authorities. Since this year, quite a number of banks intend to get into Hong Kong's RMB Bonds market, and ADBC has to face fierce competition,” said Zhao. ALB
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