Bank of China (BoC) becomes first Chinese Financial Institution to list a Green Bond on the Luxembourg Stock Exchange (LuxSE)
On July 13, 2016, the Luxembourg Stock Exchange (LuxSE) listed, and admitted to trading on its Euro MTF market, four green bonds issued by the BoC
The bonds were issued by BoC under its US$20,000,000,000 Medium Term Note Programme. Proceeds raised from the issuance of these green bonds will be used to finance projects that will promote renewable energy, pollution prevention, clean transportation and sustainable water management.
With a total issue amount of $2.8 Bn, the bond issue is made up of four different series:
- XS1437622621 U.S. $750,000,000, Floating Rate Notes due 2019
- XS1437622548 U.S. $500,000,000, 1.875 per cent. Notes due 2019
- XS1437622977 U.S. $1,000,000,000, 2.250 per cent. Notes due 2021
- XS1437623355 EUR 500,000,000, 0.750 per cent. Notes due 2021
BoC established its market leadership in the European bond market in 2014 with the ‘Schengen Bond’, becoming the first Chinese Financial Institution to list an offshore RMB Bond in Europe. With the present listing, BoC continues its Schengen Bond series as a first mover among Chinese Banks by becoming the first Chinese Financial Institution to issue a Green Bond on the European Continent and list on the LuxSE. Of equal importance, BoC demonstrates its commitment to Green Finance and environmental responsibility and sets a standard for the global Green Bond market with this listing, by becoming the first bank to list multiple Green Bond tranches simultaneously under a single programme.
This listing further confirms LuxSE’s position as the natural home of Green Bonds and LuxSE’s commitment to promoting the development of Green Finance and socially responsible investment. It demonstrates LuxSE’s capability to bring further scale to the Green Bond market and its strong commitment promoting the evolution of the Green Bond market in line with the industry best practices.
An event to mark this achievement was held by LuxSE in the presence of the Luxembourg Minister of Finance, Pierre Gramegna, Mr. Huang Changquing, Chinese Ambasador to Luxembourg and representatives of BoC and LuxSE.
Comments on the issue:
Julie Becker, Executive Committee Member of the Luxembourg Stock Exchange, said:
“Today we celebrate a tangible milestone in achieving our role in facilitating the financing of the global transition towards a low carbon economy. We welcome Bank of China’s entrance into this segment, and commend them for showing their leadership in capital markets innovation. LuxSE provides issuers with proven solutions for optimisating of Green Bond disclosure and investors with innovative assesment solutions. ’’
Mrs. ZHOU Lihong, CEO at Bank of China in Luxembourg said:
“Today we reached another milestone in Bank of China’s Bond issuance history. Following the launch in 2014 of the first offshore RMB Bond by a Chinese entity in Continental Europe, the ‘Schengen Bond’, Bank of China Luxembourg Branch continued on this path by joining forces with Bank of China Head Office and successfully launched the ‘Green Schengen Bond’ on July 5th, 2016.
This represents the very first Green Bond issued by Bank of China and the first Green Bond offering from Asia to be made in Europe.
Despite the news about the ‘Brexit’ and the turmoil left in the financial markets, Bank of China succeeded to launch the biggest international debt sale of its kind, proving once again its attractiveness to and high recognition from professional investors.
The "Green Schengen Bond" is an excellent demonstration of Bank of China’s determination to promote the green bond market development in Europe through its Luxembourg branch and our bank’s strong wish to continuously support Luxembourg in it’s strive to remain the leading Green Bond listing centre.’’
Pierre Gramegna, Luxembourg Minister of Finance said:
“The Luxembourg Government is strongly committed to the double objective of assuming a meaningful contribution to the global fight against climate change and continuing the development of Luxembourg as an international hub for climate finance. As a leading financial center in the heart of Europe with a global outlook and well established market expertise, Luxembourg plays a pivotal role in the funding of green entrepreneurship, supporting the growing market for green bonds and ensuring appropriate transparency. The LuxSE is well prepared to assume its role as a trustful partner offering the necessary guarantees for issuers and investors with a scope on sustainable development.”