Bank of China goes blue in first for Asia’s bond market

15 Sep, 2020 21:02
source: Singularity Financial

Singularity Financial Hong Kong September 15, 2020 – Bank of China has opened a new area of sustainable investing with Asia’s first blue bond. BOC is offering US dollar and Dim Sum blue bonds on Monday, making it the first borrower in Asia to market a marine sustainability transaction.

The trade is also the first blue bond to be sold by a commercial bank, and only the fourth blue bond to be sold globally, split between a $500m bond and a Rmb3bn ($440m) dim sum.

As per Bloomberg, use of proceeds are “to finance and/or refinance marine related eligible green projects as defined in Bank of China Limited Sustainability Series Bonds Management Statement”.

Bank of China Macau branch is marketing offshore renminbi two-year senior fixed-rate bonds at final guidance of 3.15%, inside initial guidance of 3.5% area. Books are over Rmb4.8bn, including Rmb1.8bn from the leads.

Bank of China, Credit Agricole, BNP Paribas, Agricultural Bank of China Hong Kong branch, Citigroup, DBS, KGI Asia, Mizuho and Scotiabank are joint global coordinators and bookrunners.

Bank of China Paris branch is marketing US dollar three-year fixed-rate senior bonds at initial guidance of Treasuries plus 130bp area.

Bank of China, Credit Agricole, BNP Paribas, Natixis and Societe Generale are joint global coordinators. They are also joint bookrunners with Agricultural Bank of China Hong Kong branch, CCB International and CICC.

Blue bonds are an innovative structure of debt financing wherein the proceeds from such issuance are earmarked for marine/water projects related to ocean conservation (hence the name “blue bonds”). These are similar to green bonds, which are earmarked for green or environmentally-friendly projects.

Blue bonds became popular in late 2018 when Seychelles issued the world’s first sovereign blue bond, followed by the Nordic Investment Bank and the World Bank’s blue deals.