China Bond House
With Chinese growth slowing, US interest rates rising, and trade tensions adding to a volatile backdrop, Bank of China showcased its ability to raise funds for Chinese issuers in challenging market conditions.
BOC kept its lead over its rivals in cross-border financings, helping both Chinese and international clients diversify their funding sources. It also added to its domestic market credentials with an enviable slate of Panda bonds – a key capability at a time when onshore renminbi bonds are poised to enter global indices.
BOC topped the underwriting table for G3 bonds from China with a 6.6% market share during IFR’s review period, according to Refinitiv data. In the renminbi market, it put enormous efforts into the internationalisation of the currency, opening new funding channels for overseas companies.
It led the Republic of the Philippines’ Rmb1.46bn Panda bond in March, an exceptionally tight debut that won enthusiastic participation from international investors and was the first sovereign Panda bond from South-East Asia.
BOC helped the Export-Import Bank of China to print a Rmb2bn Green financial bond, the first time global investors had been able to participate in a market-driven bookbuild of onshore Green bonds from a financial issuer. In the corporate sector, it also helped Hong Kong’s Sun Hung Kai Properties print a Rmb1.2bn debut Panda bond under the Bond Connect link in November.
In the offshore arena, BOC led by example, with agenda-setting deals in its own name. In April it sold a US$3.2bn-equivalent four-currency Silk Road bond to support projects under China’s Belt and Road Initiative, and followed up a month later with China’s first Sustainability bond from its Hong Kong branch, issued alongside US$1bn of Green bonds from its London branch.
BOC took that a step further in November to bring President Xi Jinping’s latest grand project – the “Greater Bay Area” of Guangdong, Hong Kong and Macau – to the attention of the capital markets with a US$1.83bn-equivalent deal split between US dollars, offshore renminbi, Macau pataca and Hong Kong dollars, to fund loans in the newly designated region.
BOC played a key role in China’s US$3bn three-part sovereign deal in October, which drew strong demand and priced tightly despite a global market sell-off during bookbuilding.
BOC was a mainstay in mega-sized Chinese corporate bonds, including ChemChina’s US$6.4bn-equivalent six-tranche dual-currency offering in March – the largest Reg S-only offering from Asia’s corporate sector.
Its international expertise went beyond the dollar and euro markets. In March, BOC helped China Eastern Airlines become the first Chinese corporate issuer in Tokyo’s Pro-bond market with a credit-enhanced deal that introduced a new concept to many Japanese investors.