Bank of China (“BOC”) announced today (12 September 2007) at the launch ceremony held at Bank of China Tower that BOC will offer Renminbi-denominated bonds in Hong Kong from 13 to 21 September. BOC is the first ever Mainland commercial bank to issue RMB bonds in Hong Kong.
The total issue size is 3 billion yuan, with the bond value at 10,000 yuan each. The offer is available to both institutional and individual investors. Two tranches will be introduced, including a 2-year term for tranche A bearing an interest rate of 3.15% and a 3-year term for tranche B bearing an interest rate of 3.35%. Interest is payable at the end of every six months. The proceeds raised will be used for the general corporate purpose of BOC.
The Joint Lead Managers and Bookrunners for the bond issue are Bank of China (Hong Kong) (“BOCHK”) and BOC International Limited (“BOCI”). The distributors comprise 17 placing banks with branches in Hong Kong, including BOCHK, Bank of Communications, Bank of East Asia, China Construction Bank (Asia), Chiyu Banking Corporation Limited, Chong Hing Bank, CITIC Ka Wah Bank, Dah Sing Bank, DBS Bank (Hong Kong), Hang Seng Bank, HSBC, Industrial and Commercial Bank of China (Asia), Nanyang Commercial Bank, Shanghai Commercial Bank, Standard Chartered Bank (Hong Kong), Wing Hang Bank and Wing Lung Bank.
Addressing at the Launch Ceremony for the bonds, Mr Xiao Gang, Chairman of BOC, said, “As the first commercial bank to launch RMB bonds in Hong Kong, BOC is all the more honoured and takes significant responsibility for the offer. The launch of RMB bonds by the Mainland financial institutions broadens both issuer type and bond currency denomination to Hong Kong’s financial market. It also widens the scope of RMB assets of Hong Kong banks. Further, it enriches the investment channels and options for Hong Kong residents and institutions and it also helps diversify the fund-raising channels and markets for the Mainland financial institutions. The RMB bond market in Hong Kong continues to develop and will become mature. This is of great and far-reaching significance to the ever-growing closer economic and financial ties between the Mainland and Hong Kong while also reinforcing Hong Kong’s status as an international financial centre at the same time.”
Mr Xiao pointed out that this year marks the 95th anniversary of the establishment of BOC and the 90th anniversary of our services in Hong Kong. Over the period of almost a century, we have witnessed and honorably contributed to the development of Hong Kong into a major economic entity within the Asia Pacific Region as well as an international financial centre. From its small beginnings, we have grown into a flourishing entity, one of the major financial service providers and the most internationalized bank in the PRC.
BOC is an important bridge connecting the financial markets in both Hong Kong and the Mainland. Its subsidiary BOCHK is one of the note-issuing banks in Hong Kong, and enjoys the largest market share in RMB business in the commercial banking sector in Hong Kong. BOCHK successfully led the underwriting of RMB bonds issued by China Development Bank and The Export-Import Bank of China. This underwriting of RMB bonds by BOC will further strengthen its leading role in Hong Kong’s financial market.
BOCI is the investment arm of BOC and operates under a structure in line with the best practices of an international investment bank. In 2006, BOCI had a 12.2% share of underwriting in Hong Kong. It was also a lead manager and arranger of numerous large-scale bond projects.
This bond issue in Hong Kong is conducive to strengthening the leading edge of BOC in its overseas business. It can also fully utilize its competitive edge in product diversification and business platform. Furthermore, with the diverse fund-raising channels, it can facilitate fostering a closer relationship between BOC and Hong Kong investors.
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