Bank of China Limited will issue RMB-denominated bonds with a total principal amount up to RMB5 billion in Hong Kong from 8 September 2010 to 24 September 2010.
The bonds will be issued with a denomination of RMB10,000 each. Two tranches of the bonds will be offered. Tranche A bonds will have a term of two years and will bear an interest rate of 2.65% per annum. Tranche B bonds will have a term of three years and will bear an interest rate of 2.90% per annum. Interest will be payable semi-annually. Both Tranche A and Tranche B will be offered to Hong Kong retail and institutional investors. The proceeds raised from the offering will be used for the general corporate purposes of BOC.
The Joint Lead Managers and Bookrunners for the bond offering are Bank of China (Hong Kong) Limited ("BOCHK") and BOCI Asia Limited ("BOCI"). The retail bonds will be distributed through 17 placing banks with branches in Hong Kong, including BOCHK, Bank of Communications Co., Ltd. Hong Kong Branch, The Bank of East Asia, Limited, China Construction Bank (Asia) Corporation Limited, Chiyu Banking Corporation Limited, Chong Hing Bank Limited, Citibank (Hong Kong) Limited, CITIC Bank International Limited , Dah Sing Bank Limited, DBS Bank (Hong Kong) Limited, Fubon Bank (Hong Kong) Limited, Industrial and Commercial Bank of China (Asia) Limited, Nanyang Commercial Bank, Limited, Shanghai Commercial Bank Limited, Standard Chartered Bank (Hong Kong) Limited, Wing Hang Bank, Limited and Wing Lung Bank Limited.
This is the third RMB bonds offering by BOC in Hong Kong since the People's Bank of China allowed Mainland Chinese financial institutions to issue RMB bonds in Hong Kong in 2007. The bonds are also the first RMB bonds offered to Hong Kong public this year. Numerous Mainland Chinese financial institutions issued RMB bonds in Hong Kong in the past few years, enriching the investment options for Hong Kong residents and corporate and also broadening the debts market in Hong Kong. In addition, they diversified the fund-raising channels for Mainland Chinese financial institutions. All these developments help strengthening Hong Kong's status as an international financial centre.
BOC, as always, plays an important role in connecting the financial markets in Hong Kong and Chinese mainland. BOCHK, as its subsidiary, enjoys the largest RMB market share among commercial banks in Hong Kong. BOCHK has successfully arranged 12 RMB bonds issued in Hong Kong, including the RMB bonds issued by Hopewell Highway Infrastructure Limited in July this year, which is the first RMB corporate bonds issuance in Hong Kong. BOCI is an investment arm of BOC. In 2010, BOCI lead-managed a number of global bond offering projects and as of 30 June 2010, ranked No. 1 in league table, in terms of underwriting amount for Chinese and Hong Kong bond issuers.
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