The New Development Bank (NDB) has successfully obtained the Letter of Registration (Zhong Shi Xie Zhu, 2019 No. RB1) of an RMB bond programme in the China Interbank Bond Market from the National Association of Financial Market Institutional Investors (NAFMII) on January 9, 2019. The NDB has been granted approval to raise up to RMB 10 billion in the China interbank bond market within 2 years of the Programme registration date. The proceeds of the Programme will be used to finance infrastructure and sustainable development projects in the Bank’s member countries.
The NDB is the first issuer to establish an onshore RMB bond programme according to the Interim Measures for the Administration of Bond Issuance by Overseas Institutions in the National Interbank Bond Market under the People’s Bank of China and Ministry of Finance Announcement [2018] No.16 (the Measures) issued on September 25, 2018.
Industrial and Commercial Bank of China Limited, Bank of China Limited, Agricultural Bank of China Limited and China Construction Bank Limited have been appointed as the joint lead underwriters of the Programme.
Bond offerings under the Programme will be eligible to institutional investors in the China Interbank Bond Market as well as offshore RMB investors through the Bond Connect scheme between Mainland China and Hong Kong.
Registration of the Programme reiterates the Bank’s commitment to become a regular issuer in China with a strong credit history in order to ensure better liquidity and diversification for investors.
“NDB will contribute to the development of financial markets in its member countries and raise funds not only in hard currencies but also in local currencies,” said Mr. Leslie Maasdorp, NDB VP & CFO. “We view China Interbank Bond Market as a very promising market that will offer the NDB an additional source of liquidity on an ongoing basis, supporting the growth of our investments in infrastructure and sustainable development projects in line with the Bank’s mandate,” he added.
In July 2016, the NDB successfully issued the first onshore bond in China for an amount of RMB 3 billion (approx. USD 450 million) and a tenor of 5 years. It was the first time that an international financial institution issued a green financial bond in the China interbank bond market and it was also the first time for the NDB to tap the capital market. The issuance was regarded as a great success, with the total subscription amounting to more than RMB 9 billion and the participation of more than 30 investors.
Background information
The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. To fulfill its purpose, the NDB will support public or private projects through loans, guarantees, equity participation and other financial instruments. According to the NDB’s General Strategy, sustainable infrastructure development is at the core of the Bank’s operational strategy for 2017-2021. In August 2018, the Bank received AA+ long-term issuer credit ratings from S&P and Fitch.