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Bank of China issued its first RMB bonds in the EU, in Luxembourg
On 8 May 2014, Bank of China Limited, Luxembourg Branch launched its first offshore-RMB “Schengen” bond, for an amount of RMB 2.5 billion. The transaction will be listed on the Luxembourg Stock Exchange and is done under the USD 10 billion EMTN programme of Bank of China Group, rated ‘A’ by Fitch Ratings and ‘A1’ by Moody's Investors Service. Bank of China, Credit Suisse, Deutsche Bank and ING are Joint Bookrunners and Joint Lead Managers.
The launch of this ‘Schengen Bond’ marks three “first-times”: the first offshore-RMB, Luxembourg listed bond issue of a mainland Chinese issuer, first bond issue of a Bank of China entity and of a Chinese mainland company in mainland Europe. This choice of Luxembourg as listing place reflects the commitment of Bank of China Group towards Europe and especially Luxembourg as an international financial center.
This first offshore-RMB bond was named ‘Schengen’ bond due to the fact that ‘Schengen’ has a special meaning in European countries. The name of a small village at the border of Luxembourg, France and Germany now stands for free travel between Schengen member countries without further application for different visas.
Today’s successful launch of the RMB 2.5 billion Schengen bond is a further step towards the internationalization of the Renminbi and shows the commitment of Bank of China, China’s most international and diversified bank with a history of more than 100 years, to promote Luxembourg as a RMB Clearing Center in Europe.
With the support from international and local institutional investors, the issuance was 2.96 times oversubscribed.
Established in July 1979 as the first Chinese financial institution in Luxembourg, Bank of China Limited, Luxembourg Branch is authorized and regulated by the China Banking Regulatory Commission and the Commission de Surveillance du Secteur Financier. BOC Luxembourg Branch offers a wide range of commercial banking services including deposits, loan banking, trade finance and financial markets services. It is leading in RMB businesses such as loans, deposits, and trade finance. For years, BOC Luxembourg Branch has been dedicated to promoting Luxembourg as the off shore RMB business center, and valued European markets very much, acting as a European hub with its 5 subsidiaries in Portugal, Poland, Belgium, the Netherlands, and Sweden. It is more than willing to be the bridge between China and Europe.
