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Bank of China Successfully Arranged the First Chinese Sovereign RMB Bond Issued Outside of China to List at London Stock Exchange


2016-06-08

On 8th June 2016, Bank of China successfully arranged Chinese Ministry of Finance's 3-year 3 billion RMB bond to list at London Stock Exchange, which is the first Chinese sovereign RMB bond issued and listed outside of China.

London Stock Exchange Group welcomed Mr Shi Yaobin, Vice Minister of the Chinese Ministry of Finance and Harriett Baldwin MP, Economic Secretary to the UK Treasury to open trading celebrating this world first listing, who were joined by H.E. Ambassador Liu Xiaoming, Chinese Ambassador to the UK, Mr Gao Yingxin, Executive Vice President of Bank of China, Mr Stuart Gulliver, HSBC Group CEO, Mr Donald Brydon, Chairman of London Stock Exchange Group and more than 50 other distinguished guests.

Mr Shi Yaobin, Vice Minister of the Chinese Ministry of Finance said: "The issuance will be marked as a milestone and has three-fold new significance. Firstly, it represents a new achievement in the China-UK financial cooperation. Secondly, it demonstrates the new status of achieving progress while ensuing stability in China's economic performance. Thirdly, it injects new impetus into the development of offshore RMB market."

Harriett Baldwin MP, Economic Secretary to the UK Treasury, said, " The UK government is absolutely delighted that China has chosen to issue its first sovereign RMB bond outside of China here in London. The China issue signals the next step in the internationalisation of RMB. For the UK, it's a reflection of a leading role London plays in the process, a meeting point between the East and the West, between investors and issuers all around the world."

Liu Xiaoming, Chinese Ambassador or the UK said, "I'm confident what we are doing today will have strengthen and upgrade China-UK cooperation in business, in finance, in many other areas. This bond listing is a momentous event for London as a global financial centre. We are witnessing another milestone for RMB internationalisation."

Gao Yingxin, Executive Vice President of Bank of China said, "It is a great honour for Bank of China (UK) Limited to take part in this historic transaction. As China's most internationalized banking group with 87 years' operation in the UK, Bank of China will continue to devote our full resources to facilitate and strengthen the economic and financial links between our two countries."

The issuance was announced by Chinese MoF on 25th May and orders have been received from a wide range of global investors. The deal was 2.8 times over-subscribed, with final allocations of 58% to EMEA investors and 42% to Asian investors.

This issuance has many London features and has been the world first in several aspects. Firstly, it is the first Chinese sovereign RMB bond listed in London Stock Exchange; secondly, it is the first Chinese asset to be included in Bank of England's eligible collateral list; thirdly, it was issued under the English law; fourthly, all key actions of the transaction were taken place in London trading time; fifthly, underwriters are UK local banks; the last but not least, this is the first time that an offshore RMB bond received more orders from EMEA than Asia, so was the final allocation.

The success of this issuance has great significance and is another milestone in the internationalization of RMB. Followed with President Xi Jinping's state visit in 2015, this is another step to deepen the financial cooperation between the two countries. The warm reception of the bond fully demonstrates global investors' recognition of China's economic growth and stabilities. In addition, the bond has provided investors with a new investment product and helps to further promote the development of London's offshore RMB market.

As the most internationalised and diversified bank in China, by leveraging its strong RMB business, diversified products and services, global network and international talents, Bank of China will continue to promote the internationalisation of RMB and the China-UK relations in the golden era.

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