CDB issued 30 billion yuan special financial bonds for network-style infrastructure

On March 16, China Development Bank (CDB) successfully issued 30 billion yuan of special financial bonds for network infrastructure with a term of 20 years at China Central Depository & Clearing Co., Ltd. (CCDC) at an interest rate of 3.29%. The bonds have been actively subscribed by investors of all kinds in the market, seeing a subscription ratio of 10.33 times. The fund raised through the bonds will be mainly invested in the construction of key water conservancy projects such as water diversion from the Three Gorges Reservoir to the Hanjiang River in the middle routes of the South-to-North Water Diversion Project, with a view to further improving the water supply capability in the middle routes so as to improve China’s water resource allocation. Officials from the Ministry of Water Resources and important underwriters of CDB bonds jointly witnessed this offering, which received substantial support from institutions including China Life Asset Management Company Limited, Zhongyuan Bank, Shanxi Securities, Bank of Rizhao, CITIC Securities, and Industrial Bank Co., Ltd. In addition, some overseas institutions took part in the subscription through the ePrime system of Bond Connect Company Limited (BCCL).

Last year, the Central Committee for Financial and Economic Affairs has adopted an overall action plan in its 11th meeting to enhance the infrastructure construction in an all-around way and build up a modern infrastructure system. It was emphasized in the meeting that the construction of network-style infrastructure, such as transportation, energy, and water conservancy, should be strengthened, with a focus on networking and reinforcing chains, to improve the network effectiveness and efficiency. As a leading bank supporting the infrastructure construction in China, CDB focused on its mandate, deepened its cooperation with the Ministry of Water Resources, and took the initiative to meet the fund-raising needs of major water conservancy projects. In the year of 2022, CDB granted loans totaling 186.4 billion yuan in water conservancy and gave priority to supporting water conservancy projects of strategic significance and for people’s livelihood including Hanjiang-to-Weihe River Valley Water Diversion, Central Yunnan Water Diversion, irrigation area of Dateng Gorge Water Conservancy Hub, and comprehensive rehabilitation of Yongding River Valley, making significant contributions to achieving stable macroeconomic performance. This time, CDB innovatively issued the 20-year-term special financial bonds for network-style infrastructure with an aim to actively guide the social funds by market-based financing, so as to provide long-term, stable financial support to water conservancy development.

An officer of the Treasury & Financial Market Department indicated that CDB would continue to focus on its mandate as development finance institution (DFI). Under the guidance of relevant ministries and commissions, with the strong support from underwriters and investors of CDB bonds, it would explore to issue series special bonds centering on the five priorities of infrastructure construction, continue to lead and encourage investments in this field, so as to jointly support the all-out efforts to strengthen infrastructure construction.