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ICBC issues RMB4 billion hybrid Lion City bonds
The Industrial and Commercial Bank of China Singapore branch issued a total of four billion renminbi (US$650.25 million) of “Lion City” bonds cleared through Singapore’s Central Depositary (CDP)
The Asset 16 Sep 2014
The Industrial and Commercial Bank of China Singapore branch issued a total of four billion renminbi (US$650.25 million) of “Lion City” bonds cleared through Singapore’s Central Depositary (CDP) with two of the three tranches being dual listed on the Singapore Exchange (SGX) and the GreTai Securities Market (GTSM). This marks the biggest Lion City bond issuance to date, eclipsing the 2 billion renminbi record it had set in 2013; with the dual-listed tranches the first of its kind for a Chinese bank.
 
The 4 billion renminbi bond issue was priced in three tranches; a two-year, 2 billion renminbi, a five-year, 700 million renminbi and a seven-year, 1.3 billion renminbi which were priced at 3.5%, 3.7% and 3.95% respectively. The two-year tranche will be listed on the SGX while both the five-year and seven-year tranches will be dual listed on the SGX and the GTSM.
 
Bookrunners for this transaction were ICBC Singapore, BNP, Citi, DBS, HSBC, Standard Bank and Standard Chartered. SinoPac Securities, together with the bookrunners were joint lead managers, with Commerzbank and Commonwealth Bank of Australia being the co-managers for the transaction.
 
ICBC Singapore’s issuance received strong support from across Asia and Europe, with orders for the hybrid Lion City bonds exceeding 7.3 billion renminbi across the three tranches, allowing the transaction to price 10bp to 15bp tighter from the initial price guidance and achieving a total issue size of 4 billion renminbi, clinching the spot for the biggest Lion City bond issue to date.
 
Singapore has grown in importance as an offshore renminbi hub, overtaking London in July 2014 to become the largest renminbi centre outside of Hong Kong. Taiwan, in response to increased competition within the renminbi space, has loosened regulations to boost its own renminbi bond markets. This transaction by ICBC Singapore which bridges two of the largest offshore renminbi centres paves the way for further internationalization of the currency and shows tremendous potential for collaboration between the two markets.
 
 

    

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