To carry out the national policy of opening up the capital market, facilitating the interconnectivity of financial markets, and exploiting the channel advantages of "Bond Connect", CDB recently specified its bond issuance mechanism to be opened to global investors on an irregular basis. CDB also published a list of cross-border coordinators.
It is reported that following the successful launch of its first global offering of the “Bond Connect” financial bond with a total value of RMB 20 billion, CDB today once again decided to issue by tender the five-year and seven-year "Bond Connect" financial bonds totaling RMB 12 billion. This issuance further clarified the mechanism of CDB bond issuance. Subsequent issuance of CDB bond in the interbank bond market will adopt a "domestic + overseas" model where interbank underwriting groups will undertake domestic distribution while the cross-border coordinator group, which is made up of 14 institutions including ICBC Asia, Agricultural Bank of China Limited Hong Kong Branch, Bank of China, Bank of China (Hong Kong), BOC International Holdings Limited, China Construction Bank (Asia) Corporation Limited, HSBC, Standard Chartered Bank, Deutsche Bank, Development Bank of Singapore, Banque de l'Indochine, BNP Paribas, Mitsubishi UFJ Securities and Mizuho Securities, will be employed to guide overseas investors to subscribe for CDB bonds.
According to the head of CDB’s Treasure & Financial Market Department, after the "Bond Connect" went on line, the infrastructure in both domestic and overseas markets was interconnected while it could still take some time before the issuance mechanism, custody model, trading habits and settlement methods were aligned with international practice. CDB has always adopted an open and tolerant attitude. It will continue to innovate in the issuance mechanism and expand the volume of bond issuance to the world. CDB is committed to establishing a market integration mechanism conducive to the participation of global investors and a proactive, open and friendly service model. In the meantime, CDB will continue to launch a variety of bonds that meet the subscription needs of overseas investors.
CDB is a development finance institution directly under the leadership of China's State Council. It is China's largest foreign investment and financing cooperation bank, medium and long-term credit bank and bond bank, with its credit rating consistent with China's sovereign rating. As the largest and most active financial bond in China's interbank bond market, the CDB bond stock has exceeded RMB 8 trillion with the annual spot trading exceeding RMB 30 trillion in 2016. It has become the preferred choice among many other types of investment products.
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