Bank of China: Developing leadership in the on- and offshore bond markets
2021 was another strong year for Bank of China’s ambitious bond underwriting business, which maintained its leadership in some markets, and pioneered new transactions in others.
Bank of China (BoC) continued to support the financing needs of China’s economy last year, lead underwriting onshore and offshore bond issues for a range of issuers and across asset-classes, including green finance, where it innovated new transactions.
This included helping to underwrite China’s first batch of carbon-neutral and sustainability-linked bonds, as well as the first green sovereign Panda bond and the first renminbi-denominated offshore green bonds to be issued by a municipal government.
In addition, BoC completed the country’s first blue bonds, the first transition bonds and the first species diversity bonds from any Chinese issuer in overseas markets.
In total, BoC lead underwrote 86 onshore green bonds worth a total of Rmb129.39 billion, and $23.37 billion in offshore green bonds, a performance that enabled the bank to maintain its underwriting leadership status in both markets, according to WIND and Bloomberg.
Aside of green finance, BoC also demonstrated leadership in traditional bond markets, where it lead underwrote domestic and international issues for a range of high-profile borrowers including China State Railway Group, State Grid Corporation of China, Sinopec, Huaneng Group, and China Three Gorges Corporation.
Together with this, BoC also supported major regional investment programmes, such as that which is being coordinated between Beijing, Tianjin and Hebei. BoC is also providing financing support to the development of the Yangtze River Economic Belt region, the Guangdong-Hong Kong-Macao Greater Bay area, the Yangtze River delta, and the Yellow River basin. In total, BoC has underwritten Rmb600 billion in bond financing for clients in these important regions.
While BoC has been at the forefront of financing the Chinese economy directly, it also continues to be a leader in the Panda bond market. Last year, for instance, BoC helped the Asian Development Bank return to the market after a 12-year absence and helped underwrite Hungary’s first sovereign green Panda bond. The bank also helped arrange Luso International Banking sell the first Panda bond in Macau, and assisted Far East Horizon, the finance and industrial group, in issuing its first Sustainable Development Goals Panda bond.
In the offshore market, BoC continues to lead, having successfully arranged all five Chinese Treasury bonds denominated in US dollars, and three denominated in euros, since 2017 when the Ministry of Finance resumed issuing sovereign bonds denominated in foreign currencies.
This leadership was demonstrated in 2021, when BoC acted as the lead arranger, lead underwriter and exclusive advisor on Shenzhen Municipal Government's first green offshore renminbi bond issuance. The bank was also the exclusive global coordinator on the Guangdong Provincial Government's first offshore renminbi bond issuance in Macau.