News - 09.03.2018

Agricultural Development Bank of China chooses Luxembourg in pioneering green bond move

  • Renminbi

For the first time ever, a Chinese green bond is registered and displayed on an international exchange.

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The bell-ringing this afternoon at the Luxembourg Stock Exchange marked the first time a green bond issued through the Bond Connect Scheme with Shanghai Clearing House and traded in the Chinese Interbank Market (CIBM) entered an international exchange. The green bond is registered on the Luxembourg Stock Exchange’s SOL market and displayed on the Luxembourg Green Exchange (LGX).

“I want to commend ADBC for making the effort and aligning their bond with international green bond standards. I am proud that LuxSE/LGX participates to ADBC’s strategy of going international and attracting global investors. Entering LGX means increased international visibility for ADBC – all bond-related information is now available in English on LGX, the leading platform for sustainable finance instruments. I am sure ADBC’s commitment will be rewarded in the form of a huge interest from investors”, commented Robert Scharfe, CEO of LuxSE.

The aim of the agreement between ADBC and LuxSE is to bridge the Chinese interbank market with international investors and facilitate the acquisition of ADBC domestic green bonds by investors located outside China. All information relating to the instruments, e.g. the planned use of proceeds, external opinions, etc., will be published in English.

Yin Jiuyong, Vice President of ADBC, said: “This is the first time information related to ADBC’s domestic green bonds will be displayed on an international stock exchange. It will facilitate connectivity among China and international investors”.

The first ever green bond issued by ADBC through the Bond Connect Scheme, worth RMB 3 billion (USD 450 million), was 4.38 times oversubscribed.

Bond Connect is a convenient channel for foreign investors interested in China’s onshore market as it removes some investment hurdles: there is no quota or the need to stipulate an intended investment amount. Overseas investors can also trade directly with eligible onshore dealers through electronic request-for-quote and native interfaces of established electronic bond trading platforms.

ADBC, one of the country’s three policy banks, is one of the largest issuers of domestic green bonds. The bank is responsible for food security, poverty alleviation, modernisation of agriculture, urban and rural integration development and key development strategy of China.