NDB successfully issues 2 bln RMB bond in China Interbank Bond Market
On September 16, 2021, the New Development Bank (NDB) successfully issued CNY 2 billion RMB-denominated Bond in the China Interbank Bond Market, bringing the total outstanding amount of RMB bonds issued by the Bank to CNY 17 billion. The Bond was placed in one tranche with maturity of 5 years with the final coupon rate of 3.02%.
The net proceeds from the sale of the Bond will be used for general corporate resources of the NDB and will be used to finance infrastructure and sustainable development projects in the member countries of the Bank, in line with the NDB mandate.
The transaction saw strong interest from both onshore and offshore RMB investors and the issue was subscribed 1.38 times. The geographical distribution of investors was as follows: Mainland China – 56%, Singapore – 23%, Europe – 15%, HK SAR – 6%. Investor distribution by type: Bank treasury – 84%, Security – 16%.
“This bond marks another formidable milestone for the New Development Bank. We successfully raised RMB 2 billion at a very attractive price, and we are grateful for the enthusiastic response from investors in the China Interbank Bond Market,” said Mr. Leslie Maasdorp, NDB Vice President and Chief Financial Officer. “Diversification of funding by instrument, currency, tenor and type of interest rate are at the heart of the Bank’s funding strategy. NDB intends to become a regular issuer in both international and local markets of its member countries with a view to establishing a strong credit history and ensuring better liquidity and diversification opportunities for investors.”
Bank of China (BOC) acted as the lead underwriter of the Bond, while Industrial and Commercial Bank of China Limited, HSBC Bank (China) Company Limited, DBS Bank (China) Limited and China International Capital Corporation Ltd. (CICC) acted as joint-lead underwriters.
Bond Summary Terms
|Issuer||New Development Bank (NDB)|
|Issuer rating||AA+ (S&P) / AA+ (Fitch) / AAA (JCR) / AAA (ACRA)|
|Settlement date||September 17, 2021|
|Maturity date||September 17, 2026|
|Listing||China Interbank Bond Market|
|Lead Underwriter||Bank of China (BOC)|
|Joint-lead underwriters||Industrial and Commercial Bank of China Limited, HSBC Bank (China) Company Limited, DBS Bank (China) Limited, China International Capital Corporation Ltd. (CICC)|
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 market economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. In 2021, NDB initiated membership expansion and admitted the United Arab Emirates, Uruguay and Bangladesh as its first new member countries.
In October 2020, the NDB has successfully registered its second RMB Bond Programme in the China Interbank Bond Market. The NDB was granted approval to raise up to RMB 20 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.