On November 26th, 2019, China International Capital Corporation (“CICC”), as Lead Manager and Bookrunner, assisted China’s Ministry of Finance (“MoF”) to complete a landmark issuance of USD 6 billion sovereign bond in Hong Kong. The total bond offering consists of USD 1.5 billion with a yield of 1.929% in 3-years, USD 2 billion with a yield of 1.996% in 5-years, USD 2 billion with a yield of 2.238% in 10-years and USD 0.5 billion with a yield of 2.881% in 20-years. The issuance is listed in the Stock Exchange of Hong Kong Limited.

This sovereign bond issuance was highly appraised by international investors. On the pricing day, 4 tranches was announced with initial price guidance of T3+60bps, T5+65bps, T10+70bps and T30+80bps, which attracted orders from many central banks, sovereign funds and other quality international investors which led to a strong orderbook realizing a 3.6-times oversubscription volume. The final price for the 3-years tranche was tightened to T+35bps; the 5-years tranche was tightened to T+40bps; the 10-years tranche was tightened to T+50bps; and the 20-years tranche was tightened to T+70bps. The investor structure of the issuance is diversified in investor type and geographical distribution. The expansion of investor coverage shows the better recognition of China’s sovereign bond.

The issuance is China’s largest issuance size of foreign currency denominated sovereign bond. This issuance symbolizes China’s willingness and determination to boost confidence in China’s Opening-Up to the global; this further deepens China’s connection to the international capital markets. The issuance will improve China’s foreign treasury yield curve, and further benefits other Chinese issuers to benchmark their international bond financing levels in the future. 

CICC, as the only Chinese investment bank to participate in the deal, was honored to have given full access and responsibilities during the preparation stage in this symbolic landmark transaction. Continuing the past sovereign bond issuances of USD 2.0 billion in 2017, the issuance of USD 3.0 billion in 2018 and the issuance of EUR 4.0 billion in 2019, this is the fourth consecutive time that CICC has acted as Lead Manager and Bookrunner to work for MoF’s international sovereign bond issuances, showing our exceptionally dominating position in the international debt capital market. “People-oriented with nation in mind”, “Chinese roots and international reach”, CICC is faithful to serve our values and principals, and will continue to provide all-around financial services for the sustainable development of the Chinese economy and financial market.