Fixed Income Pulse: China lists €4bn Sovereign Bonds in London

London Stock Exchange Group (LSEG) welcomed the Ministry of Finance of the People’s Republic of China for the listing of China’s Euro-denominated bonds in London. This is the first euro deal issued by China in 15 years and the second Chinese sovereign bond to list in London. The issuance received strong demand from international investors, including from the UK and Europe, and has set an important benchmark for Chinese issuers in the euro market. The EUR4bn notes have been admitted to London’s International Securities Market (ISM), which has become the preferred listing destination for a growing number of Chinese institutions.

Global investor base for China's Sovereign bond

Geographical Distribution - Tranche €2bn, 7Y

Geographical Distribution - Tranche €2bn, 7Y 
Source: Bloomberg, IFR, November 2019

Geographical Distribution - Tranche €1bn, 12Y

Geographical Distribution - Tranche €1bn, 12Y
Source: Bloomberg, IFR, November 2019

Geographical Distribution - Tranche €1bn, 20Y

Geographical Distribution - Tranche €1bn, 20Y
Source: Bloomberg, IFR, November 2019

Over 15 bonds from Chinese issuers have listed on London Stock Exchange so far this year, more than on any other Western Exchange. The bonds have raised a combined $10bn equivalent, already an annual record high for London Stock Exchange. Recent issuances by Agricultural Development Bank of China, Shanghai Pudong Development Bank London Branch, China Construction Bank Hong Kong Branch and ICBC Dubai Branch further highlight London Stock Exchange’s status as a partner of choice for Chinese issuers looking to access international capital through a diverse range of structures and currencies.

Pricing Date (DD/MM/YYYY) Issuer Name Issuer Rating Nominal Size Tranches Listing
05/11/2019 Ministry of Finance of the People’s Republic of China A1/A+/A+ €4bn €2bn (0.125%, 7Y)
€1bn (0.5%, 12Y)
€1bn (1.0%, 20Y)
ISM
30/10/2019 Agricultural Development Bank of China A1/A+ CNH5.5bn CNH2.5bn (3.18%, 3Y)
CNH3bn (3.4%, 5Y)
ISM
24/10/2019 Shanghai Pudong Development Bank, London Branch Baa2/BBB/BBB $300m $300m (3m$L+70bp, 3Y) ISM
17/10/2019 ICBC, Dubai (DIFC) Branch A1/A/A $1bn $500m (3m$L+66bp, 3Y)
$500m (3m$L+77bp, 5Y)
ISM
15/10/2019 China Construction Bank, Hong Kong Branch A1/A/A $1bn $1bn (3m$L+66bp, 3Y) ISM

Chinese securities admitted to ISM since October 2019

With the London Stock Exchange’s Sustainable Bond Market (SBM), issuers and investors now have a comprehensive sustainable finance platform offering distinct segments for the classification of green, social and sustainability bonds, as well as for other bonds from green economy classified issuers. London has hosted many milestone green issuances from Greater China, including the largest ever green bond listing on London Stock Exchange, the first sustainability bond on ISM, the first international green bond and the first green covered bond from China. Overall, seven different Chinese issuers have chosen London Stock Exchange as a partner to maximise the profile and visibility of their green and sustainable bonds.

London is also home to a comprehensive eco-system that supports Dim Sum issuers to London Stock Exchange’s bond markets. According to a report published by the City of London Corporation and the European Office of the People’s Bank of China, London is the leading RMB trading centre outside China, with a steadily increasing pool of capital in such currency. London’s position as the world largest FX trading centre has allowed the RMB market to flourish. Currently, there are 115 Dim Sum bonds listed in London, raising over RMB36bn for Chinese and international issuers. This year to date, 41 new Dim Sum bonds have been listed on London Stock Exchange.
 
For further information, please visit our website, or send us an bonds@lseg.com or call +44 (0)207 797 3921.

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