12th January 2022, NEW YORK – Agricultural Bank of China New York Branch (“ABC NY”) successfully issued its 3-year US$ 400 million senior unsecured notes and 5-year US$ 300 million senior unsecured green notes in Reg S format on 11th January. The 5-year tranche marks ABC NY’s return to the Green Bond market since its last issuance a year ago, and the first Green Bond issuance by a Chinese financial institution in 2022. The Green Bond proceeds will be used to finance and/or refinance the Eligible Green Projects as defined in ABC NY's newly established Green Financing Framework. The Green Financing Framework received a "positive" Second Party Opinion (“SPO”) from S&P Global Ratings, in which it confirmed the Framework’s alignment with the latest market standards including Green Bond Principles 2021 and Green Loan Principles 2021. The "Use of Proceeds" pillar of the Framework was rated "Strong" in S&P’s SPO Report. The success of this issuance and the strong recognition from the SPO provider demonstrated the wide appreciation of ABC NY’s continued commitment to green finance.
The 3-year US$ 400 million tranche was priced at a re-offer spread of T+35bps to yield 1.578%, and the 5-year US$ 300 million tranche was priced at a re-offer spread of T+47bps to yield 2.020%. Despite the heightened market volatility in the days preceding this transaction driven by US Fed’s hawkish tone which also triggered wide swings in US Treasury yields, ABC NY’s issuance was well received by a diversified investor base. The 3- and 5-year tranches achieved Initial Price Guidance-to-final price tightening of 35 bps and 38 bps, respectively. The 3-year tranche was priced at a negative New Issuance Concession. The transaction attracted active participation from high-quality international investors including policy banks, national pension funds, insurers, global banks, asset managers and private banks across Asia, Europe and the US (offshore), reflecting the strong appeal of ABC's credit story. The Green Bond tranche also drew notable demand from reputable Asian and European green investors. ABC NY effectively opened the USD bond market for Chinese financial institution issuers by setting new liquid benchmarks.
ABC firmly commits to supporting the high-quality development of green finance. In 2021, ABC officially signed the UN Principles for Responsible Banking and became a member of the United Nations Environment Programme Finance Initiative. It also joined the Task Force on Climate-related Financial Disclosures to promote high-quality disclosure and transparency. As one of the strategic overseas branches of ABC, ABC NY is strongly focused on developing an internationalized Green Finance business. The Green Bond proceeds will be allocated to the 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, Mizuho Securities, Standard Chartered Bank. The Joint Lead Managers and Bookrunners are ABC International, Bank of China (Hong Kong), Bank of Communications, China Construction Bank (Europe) S.A., China Everbright Bank Hong Kong Branch, China International Capital Corporation, Chiyu Banking Corporation Limited, CMB Wing Lung Bank Limited, DBS Bank Ltd., Haitong International, HSBC, Industrial Bank Co., Ltd. Hong Kong Branch, Shanghai Pudong Development Bank Hong Kong Branch. BofA Securities and Crédit Agricole CIB are the Joint Green Structuring Advisor for the Green Notes.