Agricultural Bank of China New York Branch launches its first Green Bond in a USD950mn issuance
11th January 2021, NEW YORK – Agricultural Bank of China New York Branch (“ABC NY”) successfully issued 3-year USD650mn and 5-year USD300mn senior unsecured bonds in Reg S only format on 11th January. The 5-year tranche was issued in the green format, and marks the first Green Bond issuance by ABC NY, which is also the first USD-denominated green bond issued by a US-based Chinese bank branch, as well as the first by a Chinese financial institution in 2021. The Green Bond proceeds will be used to finance and/or refinance eligible green assets. This transaction represents ABC NY’s successful return to the international debt capital market after nearly 5 years, and is another landmark Green Bond issuance following Agricultural Bank of China’s debut in this space in 2015.
The 3-year USD650mn and 5-year USD300mn tranches were priced at reoffer spreads of 68bps and 80bps to yield 0.899% and 1.29%, respectively. By seizing the constructive market window and adopting a successful execution strategy, ABC NY achieved attractive funding levels. Notably, the 3-year pricing and the 5-year reoffer yield touched the record lows among similar issuances by Chinese commercial banks. The transaction attracted strong demand from high-quality international investors including central banks, sovereign wealth funds, global banks, asset managers, funds and private banks across Asia, Middle East, Europe and the US (offshore), demonstrating investors’ continued appreciation of ABC’s credit strength. At the back ABC’s robust Green story, the Green Bond tranche also drew strong demand from reputable Asian and European green investors.
ABC has a long-term commitment to China’s green initiative and the ultimate target of carbon neutrality. ABC is actively engaged in the development of green credits, green innovation, green operation and CSR activities. As one of the premiere overseas branches of ABC, ABC NY places a strong focus on developing an internationalized Green Finance business. The Green Bond issued this time is aligned with the four pillars of the ICMA Green Bond Principles, with its proceeds to be used to finance and/or refinance eligible assets under three pre-defined categories, namely Renewable Energy, Clean Transportation and Sustainable Water and Wastewater Management.
The bonds will be listed on HKSE. The Joint Global Coordinators are Agricultural Bank of China Limited Hong Kong Branch, BofA Securities, Citigroup, Crédit Agricole CIB, J.P. Morgan and Mizuho Securities. The Joint Lead Managers and Bookrunners are Bank of China (Hong Kong), Bank of Communications, Chiyu Banking Corporation Limited, CLSA, CMB Wing Lung Bank Limited, DBS Bank, HSBC, Standard Chartered Bank and Wells Fargo Securities. BofA Securities and Crédit Agricole CIB are the Joint Green Structuring Advisor for the Green Bond tranche.