Allen & Overy has advised the joint lead managers and joint bookrunners in connection with the offering of USD2 billion sovereign bonds by the Ministry of Finance of the People’s Republic of China.
This is the first foreign currency bond offering by the Ministry of Finance since 2004. The USD2 billion sovereign bond issue consisted of a USD1 billion 5-year tranche and a USD1 billion 10-year tranche.
Commenting on the transaction, Allen & Overy partner Agnes Tsang said: “This capital raising demonstrates the Chinese Government’s commitment to international capital markets and reinforces Hong Kong’s status as a preeminent international financial centre.”
The Allen & Overy team in Hong Kong advised Bank of China, Bank of Communications, Agricultural Bank of China, China Construction Bank, CICC, Citigroup, Deutsche Bank, HSBC, ICBC and Standard Chartered Bank. It was led by Agnes Tsang, with support from lawyers Jaclyn Yeap, Tiffany Tse and Jiayin Yu.
Linklaters acted for The Ministry of Finance of the People’s Republic of China on its first US dollar sovereign bond issuance since 2004. This US dollar bond issuance underlines China’s drive to establish itself as a global player in the international markets as part of its “Going Out” and “Belt and Road” initiatives. Reflecting the international nature of the offering, the US dollar bonds are English law governed, cleared through Euroclear and Clearstream and issued in Hong Kong, helping to cement Hong Kong’s position as the leading international financial centre in China.
Importantly, the transaction provides a new yield curve for pricing future US dollar bonds issued by China’s corporates. Prior to this issuance, there was no official sovereign credit benchmark for corporate US dollar issuances out of China.
Linklaters has been advising on the Ministry of Finance’s bond issuances since 2009. Linklaters is the only foreign institution who has participated in all of the international offerings by the Ministry of Finance since 2009, including its London listed Renminbi bond last year - the first ever Chinese sovereign Renminbi bond issued outside of China.
The Linklaters team on this deal was led by partner William Liu, managing associate Karen Cheng and associates Libin Shi and Kate Yang.
(Source: Allen & Overy + Linklaters)
