On July 29, 2020 in Shanghai, CDB issued a new green finance bond with the theme of “Responding to Climate Change” simultaneously on multiple markets. The 3-year bond under the Bond Connect program had a total issue size of 10 billion yuan and a fixed interest rate of 2.4984%. The money raised will go to low-carbon transportation and other green projects to slow and curb climate change and reduce pollutant emissions. Ouyang Weimin, President of CDB, was on-site to launch the multi-market issuance of the bond.
It is reported that the bond issuance represents CDB’s another innovation to advance infrastructure connectivity within the bond market, promote free and smooth flows of bond market elements, and support Shanghai’s shift to an international financial center. The bond was subscribed by global investors through the interbank bond market, exchanges, and the commercial bank OTC market. Bonds worth 5 billion yuan were issued to the interbank bond market through Shanghai Clearing House and were oversubscribed 15.52 times. Investors included Shanghai Pudong Development Bank (SPDB), Agricultural Bank of China (ABC), China Everbright Bank (CEB), Orient Securities, and Bank of Ningbo. Bonds worth 2 billion yuan were issued to the exchange-based bond market through Shanghai Stock Exchange and Shenzhen Stock Exchange and were oversubscribed 2.70 times. Investors included Orient Securities, CITIC Securities, CDB Securities, Bank of Zhengzhou, and Industrial and Commercial Bank of China (ICBC).
It is reported that bonds worth 3 billion yuan were sold retail to the public on the OTC and online banking platforms of commercial banks with the help of China Central Depository & Clearing Co., Ltd. These banks included ICBC, ABC, SPDB, Industrial Bank, Beijing Rural Commercial Bank, Bank of Hangzhou, Shanghai Rural Commercial Bank, Ping An Bank, Bank of Luoyang, Bank of Nanjing, Bank of Ningbo, and Shunde Rural Commercial Bank. Up to 10,000 bank outlets were involved in the sales of these bonds to the public through convenient “zero-contact” wealth management services promoting the concept of socially responsible investing.
CDB also worked with a series of cross-border banking institutions, including ICBC (Europe), ICBC (Asia), ICBC Dubai (DIFC) Branch, ICBC Singapore Branch, Hong Kong and Shanghai Banking Corporation, Deutsche Bank, ABC Hong Kong Branch, Bank of China, BOCOM Hong Kong Branch, CEB Hong Kong Branch, SPDB Singapore Branch, Banque de l’Indochine, and Mizuho Bank, to proactively coordinate the overseas issuance of the bond. The bond received more than 4 billion yuan worth of orders from overseas investors, reflecting recognition of China’s bond market and ESG (environmental, social, and governance) investing by global financial institutions.
According to Ouyang Weimin, CDB’s future work will revolve around serving China’s national strategies and economic and social development. While continuing its efforts to develop the bond market, CDB will leverage innovation as a leading driver for development. With the guidance and support from the People’s Bank of China, the China Securities Regulatory Commission, and other regulators, CDB will also join hands with market participants to promote the innovative integration of bond market infrastructures and the building of a high-quality bond market that better serves the real economy.
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