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CDB HK Branch Issued USD 3bn Equivalent Dual-Currency Notes

Hong Kong
2017-02-28 15:54

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China Development Bank Hong Kong Branch (“CDB Hong Kong”) issued USD and HKD floating-rate notes totaling USD 3bn equivalent in the offshore bond market, so as to facilitate the “One Belt, One Road” initiatives of China. The transaction marks the largest floating-rate note issuance and the largest HKD bond issuance among the Chinese banks. It promotes the development of HKD bond market and Hong Kong’s status as an international financial center.
 
China Development Bank Hong Kong Branch printed 3 tranches of notes through book building, with the USD 850 million 3-year tranche priced at 3m$L+55bp, the USD 1.15 billion 5-year tranche priced at 3m$L+70bp, and the HKD 7.75 billion 3-year tranche priced at 3m Hibor+50bp. The issuance was received by the market with orders coming from over 220 accounts around the globe. Notably, the deal attracted strong interest from central bank investors, which contributes to a high quality orderbook. The EMEA participation in the USD tranches exceeded 17%, which is much higher than the average EMEA distribution of Chinese issuers. This is CDB Hong Kong’s first HKD bonds in public offering format. The HKD tranche also witnessed active participation from a diversified investor base covering Hong Kong, Singapore, Taiwan, and Europe, demonstrating CDB bonds’ strong appeal to global investors.                         
The Joint Book Runners and Joint Lead Managers for the USD notes are Bank of China, BNP PARIBAS, BOCOM HK Branch, China Construction Bank (Asia), Crédit Agricole CIB, HSBC, ICBC (Asia), Mizuho Securities, National Australia Bank Limited, and Wing Lung Bank Limited. The Joint Book Runners and Joint Lead Managers for the HKD notes are Bank of China, BOCOM HK Branch, China Construction Bank (Asia), HSBC, OCBC Bank, Standard Chartered Bank, and Wing Lung Bank Limited.
 
China Development Bank Hong Kong Branch is the only offshore branch of China Development Bank. CDB Hong Kong has been active in multi-currency fund raising to facilitate the “Going Out” of Chinese enterprises and the “One Belt, One Road” initiatives. The debut issuance of CDB Hong Kong in 2016 received overwhelming investor interest. This time in 2017, CDB Hong Kong visited the international capital market again, offering floating-rate note products in different currencies and different maturities with its first HKD bond public offering marking the largest HKD bond issuance among the Chinese financial institution issuers. This successful transaction fully demonstrated CDB Hong Kong’s commitment to promote the financial market development through innovation and to support the Chinese enterprises and financial institutions’ fund raising in Hong Kong market. 
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