Bank of China leads debt financings across borders

In association with Bank of China November 2022
6 min read

As the most globalised and integrated Chinese bank, BOC provides a wide range of financial services for customers across onshore and offshore China as well as 62 countries and regions. The strong cross-border business franchise has made BOC the number one choice for customers with cross-border business. Being one of the opinion leaders in Chinese onshore and offshore debt capital markets, BOC has fulfilled the mission of showcasing the world the value of Chinese credits as well as assisting more high quality issuers to step into the onshore and global financial markets. BOC offers a comprehensive series of financial, investment and wealth management products to personal, corporate and institutional clients. Among these high-quality products, Panda bonds and cross-border bonds are the flagship products, as BOC prides itself in being the leading bank in international bond markets and providing its clients with more diversified global funding resources.

In 2022, BOC has once again been in 1st place in the offshore China bond market, marking the sixth year that the bank has clinched the industry’s top accolade since 2016. In 2022, BOC has underwritten 102 deals with total issuance volume equivalent to US$4.197bn and covered 41.8% of the total deals during the year. Recognised for its innovation abilities, BOC provides a full range of services in debt capital market, including the currencies of US dollar, euro, sterling, offshore renminbi, Hong Kong dollar, Macau pataca and Australian dollar, and a variety of products. BOC aims to effectively build a bridge straddling the domestic and international markets through its leading underwriting services and selling abilities. The bank was lead arranger for the Ministry of Finance of China in its US dollar-, euro- and CNH denominated offshore bond offerings for several years, and was left lead for all three CNH local government bonds in 2022, which comprised Hainan’s first local government GSBS (Green, Social, Blue and Sustainable) CNH bonds, Guangdong’s and Shenzhen’s second local government CNH bonds after their debuts last year. The issues effectively promoted cross-border financial connectivity and cooperation, expanded and deepened the CNH debt capital market, and contributed to the internationalization of RMB.

Fully utilizing the two-way opening-up reformation trend of the bond market, BOC has also brought to market a series of innovative solutions which combined traditional fixed income products together with localized regulatory characteristics. BOC printed the first Yulan bond and the world’s first green bond aligned with the updated “IPSF Common Ground Taxonomy” in history. As one of the first recognized depository and clearing banks, BOC acts as the leading market maker in the Southbound trading leg of Bond Connect and helps to promote the connection between onshore and offshore markets. BOC is also a pioneer and leader in the international green bond market. The tally of its offshore green bond underwriting added to more than US$28bn as of October 31st 2022, topping the list of all Chinese offshore underwriters from 2018 to date. As an issuer, the bank sold the first blue, transition and biodiversity bonds of a Chinese bank credit in the offshore market. Also, the bank acted as the sole green consultant in the first Chinese local government offshore CNH bonds.

Since the Panda bond market reopened in 2014, BOC dominated the Panda bond underwriting league table for eight consecutive years and contributed to product innovation with milestones of remarkable issuance. In 2022, BOC continues to maintain its leadership in the market, with a market share of nearly 25% in the China interbank Panda bond market, still ranking first. BOC has actively expanded its scope from Asia, Europe, America, the Middle East and many countries and regions along the “Belt and Road”, and has successfully underwritten about 150 Panda bonds. Its clients include the Philippines, Hungary, Portugal, Poland, AIIB, New Development Bank, ADB, Crédit Agricole, Mercedes-Benz and BMW so far. Besides, BOC has committed to promoting product innovation and to creating and fostering a diverse and inclusive environment that ensures the Panda bond market will gain development and prosperity. As the left lead underwriter, BOC assisted the Asian Development Bank to issue a RMB 2bn (US$276m) Panda bond in 2021, which marked its return to the domestic market after 12 years, BMW in completing the first European corporate public Panda bond offering, and Daimler in its first Panda bond issued as a NAFMII seasoned issuer. BOC also led the first green sovereign Panda bond issued by Hungary and first supra-national sustainable Panda bond by AIIB.

Attributed to the globalised and integrated financial service network, BOC has managed to set up a multinational franchise for clients—a dynamic mechanism that is built in the Head Office in Beijing, mobilizing bond underwriting and distribution forces from Hong Kong, London, Singapore and Luxembourg centers. Operating and supporting this extensive network, BOC has a large pool of seasoned talents, plus a full line-up of products and services that cover the entire value chain, ranging from underwriting, issuance, pricing and distribution, to trading, investment and research. Besides this, BOC has built a cross-selling platform that covers not only issuers but also investors, from both domestic and international markets. It provides different types of investors a greater variety of investments to include in their portfolios, and businesses the possibility to raise the capital they need in the market of their choice. Attributed to the ongoing reformation and opening-up of the Chinese capital market, BOC will seize the chance to grow as a more internationalized and multifunctional bank and contribute to create a more resilient, well-functioning, international and globally coherent debt securities market environment in China.