China Bond House
With onshore yields under pressure, Bank of China stepped up for its clients in the international markets, helping drive another record year for Asian issuance and maintaining its lead over its rivals.
BOC was the top Chinese bank in the offshore underwriting table with US$12.6bn of league table credit from Chinese G3 deals for a 9% market share during the awards period, according to Thomson Reuters data. It handled 96 G3 issues for Chinese clients, making it one of the busiest banks in the overall Asian market.
In a difficult year for onshore bonds, BOC used its extensive connections and wide distribution network to maintain access for its clients. It also brought international issuers and investors to the renminbi market, opening new funding channels through Bond Connect and Panda bonds.
In the international arena, the group delivered for both public and private-sector clients.
BOC played a key role in China’s US$2bn sovereign benchmark, the nation’s first in 13 years, and helped deliver tight pricing for a deal deliberately targeted at global investors.
It showed off its international credentials in April with a US$3.05bn four-currency Silk Road bond for four BOC branches, simultaneously tapping US dollars, euros, Australian dollars and offshore renminbi.
Other multi-tranche jumbo deals included Sinopec’s two four-part US dollar deals in 2017, totalling US$3.4bn in April and US$3.25bn in September, and State Grid Corporation of China’s US$5bn four-part deal, the largest US dollar deal of the year from China’s corporate sector. It was also involved in Postal Savings Bank of China’s US$7.25bn Additional Tier 1 capital raising, the biggest single-tranche US dollar bond from Asia.
BOC introduced innovative products to the market, such as its own US$500m secured Green bond, and brought numerous first-time issuers to the market, such as Haier Group, China Southern Power Grid, State Development & Investment Corp and Yingchuan Tonglian Capital Investment Operations.
In contrast to a booming offshore Chinese bond market this year, the domestic bond landscape was much tougher as yields kept rising amid China’s efforts to deleverage its financial system. BOC, however, worked hard to open up the renminbi market to international participants, and underwrote five of the first seven new issues to use the newly opened Bond Connect.
In the Panda market, BOC led Republic of Hungary ‘s Rmb1bn debut, capturing a calm issuance window in late July when the market recovered from a long slump, and was active as an issuer, when Bank of China (Hong Kong) printed Rmb9bn of one-year notes in September, the largest single offering in the growing Panda market.
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