AIIB debuts with sustainable panda bond
The Asian Infrastructure Investment Bank (AIIB) has priced its debut renminbi-denominated sustainable development bond in the China Interbank Bond Market (CIBM). The RMB3 billion ($420million) issue has a maturity of three years with a coupon of 2.4% and carries the Combating COVID-19 label approved by the National Association of Financial Market Institutional Investors.
The issue generated a final book size of RMB8.34 billion. The bonds were 2.78 times oversubscribed by more than 20 investors with 35% allocated to domestic and 65% to international investors.
AIIB is the first triple-A internationally rated issuer to have entered this market since the release in 2018 of the new panda bond guidelines governing international issuers. The bond is zero percent risk weighted in China and was priced at 23bp lower than the valuation of China Development Bank Bonds as of close of business 10 June 2020.
Net proceeds from the issue will be included in the ordinary resources of AIIB and used to fund AIIB’s financings, including those under AIIB’s COVID-19 Crisis Recovery Facility (CRF). Bank of China Limited was lead underwriter and bookrunner. BNP Paribas, China Construction Bank Corporation, China International Capital Corporation and HSBC were joint lead underwriters. Credit Agricole was a financial advisor on sustainability.
