On 9th January 2014, the book building of the first London offshore RMB bonds issued by Bank of China London Branch was successfully completed? making it the highest value single issue of RMB bonds in London and providing UK and European investors with an additional high quality RMB product.
According to the syndicate team, the bonds were heavily oversubscribed and were finally priced with a yield of 3.45%. In contrast to previous deals with major investors from Hong Kong and Asia, the final allocation of this issuance reached a record high of 40 percent allocated to European investors. The funds raised from the deal will be entirely retained in London to support the further development of the London offshore RMB market as well as UK-China bilateral trade and investment.
The successful completion of the first RMB bond issuance in London's offshore RMB market in 2014 not only reflects the market recognition of the bond structure, attractive pricing as well as the good rating of Bank of China, but also reflects the market confidence in RMB internationalization and the recognition of the bank's leading role in the offshore RMB market.
Wenjian Fang, the General Manager of Bank of China London Branch said: "Bank of China London Branch has been operating in the UK for 85 years. We are always committed to the development of the financial market in London. As the largest Chinese bank by assets in the UK with the longest continuously operating history and widest customer base, Bank of China has strong confidence in London's RMB market. We will continue to add our bricks to it to make it bigger and stronger, together with other market players.
The great success of the issuance again proves that London has huge advantages in foreign exchange market, capital market and institutional investor base, which will further attract more and more high-quality RMB bond issuers. Mark Boleat, Policy Chairman for the City of London Corporation said, "The City of London views today's Bank of China RMB bond issuance as further demonstration of London's comprehensive range of RMB products and services and the financial sector's continued dedication to meeting the needs of UK and European corporate. The issuance was also highly commended by the UK banking community. Spencer Lake, Group General Manager and Global Head of Capital Financing at HSBC, which was a joint lead manager on the deal, said:
"We are very proud to be part of this successful inaugural transaction. I have no doubt that this strategic move will further assist the Bank of China's international success and underscore London's role as a leading RMB hub. Support from a huge range of public and private UK institutions is putting London at the forefront of the internationalisation of the Chinese currency.