China Construction Bank plans multicurrency sustainability, green bonds

By Rebecca Melvin

Concord, N.H., April 13 – China Construction Bank Corp. Ltd. has selected banks to arrange a series of fixed-income investor conference calls regarding its green framework and multicurrency, multi-tranche sustainability-linked bond benchmarks with short to intermediate maturities, according to a market source.

The conference calls will be held on Wednesday to introduce the bank’s green, social, sustainability and sustainability-linked bond framework and newly established transition bond framework.

The Regulation S securities will be denominated in dollars, euros and renminbi under a $15 billion medium-term note program and, if issued, subject to market conditions, are expected to be rated A1 by Moody’s Investors Services.

Dollar deal

Specifically, China Construction Bank Corp. Hong Kong Branch plans to price a dual tranche deal of dollar-denominated sustainability-linked bonds due in three and five years.

China Construction Bank, Agricultural Bank of China, Citigroup, HSBC and Mizuho Securities are the joint global coordinators, joint lead managers and joint bookrunners; and Bank of China, Bank of Communications, BNP Paribas, BofA Securities, BOSC International, China Everbright Bank Hong Kong Branch, China International Capital Corp., CLSA, Credit Agricole CIB, ICBC, J.P. Morgan, Nanyang Commercial Bank and SMBC Nikko are joint lead managers and joint bookrunners.

The bank’s key performance indicator for the sustainability-linked bonds is the percentage of the bank’s balance of green loans to the bank’s adjusted gross loans and advances to customers, or the KPI.

For the three-year sustainability-linked bond, the target will be of an amount equal to or greater than 9.5% of the KPI as of Dec. 31, 2022. If the bank does not achieve the three-year target on the June 30, 2023 observation date, the coupon rate will step-up by 25 basis points on its October 2023 interest payment date.

For the five-year target, the sustainability performance will be of an amount equal to or greater than 10% of the KPI as of Dec. 31, 2023. If the five-year target is not achieved on June 30, 2024, the coupon rate will step up by 25 bps with effect from the October 2024 interest payment date.

The net proceeds from the bond issue will be for funding and general corporate purposes.

Euro deal

China Construction Bank Corp. Luxembourg Branch plans to price a euro-denominated benchmark senior green bond with short or intermediate maturity.

The joint global coordinators, joint lead managers and joint bookrunners of this deal are China Construction Bank, Agricultural Bank of China, Bank of China, BNP Paribas, BofA Securities and Credit Agricole CIB; and ANZ, Bank of Communications, China International Capital Corp., Citigroup, Commerzbank, Deutsche Bank, DZ Bank AG, ICBC, Societe Generale, Standard Chartered Bank AG and UBS are the joint lead managers and joint bookrunners.

The net proceeds will be used to finance and/or refinance, in whole or in part, loans to customers involved in, as well as the bank’s own operational activities in, eligible green projects.

Renminbi deal

China Construction Bank Corporation Singapore Branch has mandated China Construction Bank, Bank of China, DBS Bank Ltd., HSBC, ICBC and Standard Chartered Bank as joint global coordinators, joint lead managers and joint bookrunners and Agricultural Bank of China, ANZ, Bank of Communications, China Everbright Bank Hong Kong Branch, CLSA, CTBC Bank, Industrial Bank Co., Ltd. Hong Kong Branch, Mizuho Securities and UBS as joint lead managers and joint bookrunners for its proposed renminbi-denominated two-year or three-year fixed-rate benchmark senior transition bond offering.

The net proceeds from the transition bond will be used to finance or refinance, in whole or in part, loans to customers involved in as well as the bank’s own operational activities in eligible transition projects.

The sustainability-linked bonds and the green bond will be issued in accordance with the bank’s enhanced GSSS bond framework. The transition bond will be issued in accordance with the bank’s newly established transition bond framework.

Ernst & Young has issued a pre-issuance attestation report for the sustainability-linked bond, green bond and transition bond. The sustainability-linked bond, green bond and transition bond will also receive Hong Kong Quality Assurance Agency external review report and/or certificates.

The lender is based in Beijing.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.