15 October 2015

Climate Bonds Welcomes Agricultural Bank of China $US 1bn Green Bonds Issue

The Agricultural Bank of China have announced a mixed US dollars (USD) and Chinese yuan (CNY) three tranche green bond issuance to the value of $US 995million.

This has been warmly welcomed by the Climate Bonds Initiative.

The first bond is $US 400 million over 3 years, the second is $US 500million over 5 years and the third is denoted in CNY 600million ($US 95m) for 2 years.

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 22nd October.

“This is a welcome development in the international green bond market. The Agricultural Bank announcement reflects growing Chinese interest in green bonds as an international funding vehicle for low carbon and climate based investment,” Climate Bonds CEO Sean Kidney said.

“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 People’s Bank of China (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.

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