Fixed Income Pulse: ICBC London branch becomes the first Chinese Bank to issue a sterling bond

ICBC Deal at glance

Industrial and Commercial Bank of China (ICBC), acting through its London branch, successfully issued a three-year GBP 600m bond on London Stock Exchange’s International Securities Market. The issuance is the first ever GBP- denominated public bond offering by a Chinese bank – an important milestone for the sterling bond market and Asian issuers.

ICBC, China’s largest commercial bank, continues to be at the forefront of innovation within debt capital markets. In 2018, ICBC issued its second Certified Climate Bond through their London Branch, which received the Green Bond Pioneer Award in 2019 and is currently the largest green bond listed on London Stock Exchange.

The GBP benchmark transaction was announced on 24 July 2019 with initial pricing of UK Gilts + 115-120bps. With a large reverse anchor order from an Asian investor and a positive response from accounts through Asian market hours, the orderbooks were announced north of GBP 400m at the UK open. As momentum continued, orderbooks reached above GBP 900m and the issue was increased in size to satisfy orders. The GBP 600m transaction was subsequently launched at UK Gilts +108bps - a spread tightening of 7-12bps from IPTs – achieving attractive pricing in line with ICBC London’s targets.

The success of ICBC’s debut public sterling bond highlights a strong appetite for Chinese credit from UK, European and Asian investors. The issuance received particularly strong demand from UK investors and the final orderbook was allocated 50% to UK & Ireland. Overall, more than 40 different investors participated in the transaction.

ICBC graph

Accessing London’s capital markets has enabled ICBC London Branch to diversify its investor base by tapping into new funds and establish a benchmark for future sterling issuances by non-UK issuers.
 
The listing of this landmark bond further highlights London Stock Exchange’s status as a partner of choice for Chinese issuers looking to access international capital, and the UK’s strengthening economic and financial relationship with China.
 
London has hosted many landmark issuances from Greater China, including the largest ever green bond listing on London Stock Exchange, the first sustainability bond on London Stock Exchange’s International Securities Market, and the first international green bond and green covered bond from China. ICBC London Branch is one of 18 Chinese issuers to have issued a bond on London Stock Exchange, raising a combined $16.5bn.

Download the Debt Capital Markets Update - Q2 2019.

For further information, please visit our website, or send us an email at bonds@lseg.com or call +44 (0) 207 797 3921

More recent

Going direct: a Wise decision

Not every listing on the public markets has the aim of raising fresh capital. For fast-growing international technology company Wise, its Direct Listing on the Main Market of London Stock Exchange provides a way to broaden its ownership while remaining focused on its mission. Co-founder and CEO Kristo Käärmann explains their novel thinking and approach.

Learn more
Growth in tech, sustainable finance and diverse boards define London’s first half.

The depth and level of support provided by London’s markets to the rapidly evolving capital needs of issuers and investors in the global economy was vividly underlined in a strong and active first half of 2021.

Learn more
Trustpilot: Denmark’s tech unicorn puts its trust in London

Founded in Denmark in 2007, Trustpilot has developed into a global review platform with a mission to create a universal symbol of trust. Joining the premium segment of London’s Main Market, with its high standards of regulation and corporate governance, was an obvious choice for the first Danish tech unicorn to list in London.

Learn more
Global exposure, best execution: why London is at the centre of global securities trading

Robert Barnes
Group Head of Securities Trading & CEO Turquoise Global Holdings

 

The world trades in London

In the time zone that is central to the global business day, London’s role in global finance has always been pivotal. And at London’s heart is London Stock Exchange, which for centuries has provided choice and liquidity for investors and traders

Learn more