London Stock Exchange Group today welcomes the listing of the inaugural Green covered bond issued by the Bank of China
London Stock Exchange Group(LSEG) today welcomes the listing of the inaugural Green covered bond issued by the Bank of China on the 3rd November 2016 and also welcomes Mr. Tian Guoli the chairman of Bank of China, Mr Yi Gang the deputy chairman of People's Bank of China, and Mr Simon Kirby of HM Treasury .
The USD 500m 3 year transaction was arranged by the Bank of China’s London branch. This bond follows on from the G20 Green Finance Study Group (GFSG) established in January 2016 and co-chaired by the People’s Bank of China and the Bank of England. The aim of this initiative is to encourage green finance innovation and to promote green finance development in both the onshore and offshore markets.
The bond featured an innovative "double green” structure with a pledged portfolio of bonds which are qualifying green financial assets held by Bank of China Head Office. This enabled the bond to be rated Aa3 by Moody's (equivalent to China’s sovereign rating) and the highest of any Chinese green bond issued thus far. The coupon is 1.875% with a spread of T+95. The deal attracted over 50 orders from investors with 28% allocation to European investors some of whom were participating in Bank of China’s bonds for the first time.
The transaction was notable not only as the first Green Covered Bond but also as the first Covered Bond from China breaking the ground for a new class of securities with which international investors may diversify their portfolios.
Bank of China has a long and proud history as the most internationally-established of the Chinese banks with an office in London since and with this deal has continued to demonstrate that it is one of the leading banks for green and sustainable development globally.