10:03 GMT07 March 2021
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    One of Asia's largest development banks has issued a multimillion-dollar bond for domestic and international investors in a bid to help clients meet international standards in sustainable development as well as diversify foreign investment in the world's second-largest bond market.

    A major Sustainable Development Bond has been successfully priced in the Chinese Interbank Bond Market (CIBM), the Asian Infrastructure Investment Bank (AIIB) announced on Thursday.

    The bond is valued at 3bn Yuan ($424m USD) and will carry the 'Combatting COVID-19 label' as approved by the National Association of Financial Market Institutional Investors, the bank said in a statement.

    Both mainland and foreign investors have backed the issuance, receiving 35 and 65 percent, respectively, expanding the bond's book size to $1.18bn (8.34 Yuan).

    “The debut panda bond issuance represents an important milestone for AIIB as we enter the Chinese bond market for the first time,” AIIB president and board chairman, Jin Liqun, said in a statement.

    He added that the issuance would help raise capital to help the bank's short-term measures against COVID-19 and build sustainable infrastructure in the future, as well as internationalising the Chinese renmenbi.

    "As an international organization headquartered in Beijing, AIIB is also playing a role in the internationalization of China’s capital markets by providing both onshore and offshore investors with a very high quality RMB investment. This successful transaction serves as an important benchmark for our future issues in the years ahead,” he concluded.

    The AIIB is the first AAA-rated multilateral development bank by international credit ratings associations to access China's Panda bond market, Hu Kun, Bank of China general manager of the Investment Banking and Asset Management Department said.

    The net proceeds from bond sales will help fund projects proposed by the bank, including those in its COVID-19 Crisis Recovery Facility (CRF), which aims to build a "coordinated international response to counter" the ongoing pandemic, with an initial size of $5bn to $10bn USD, the bank said.

    According to the AIIB, two projects were funded in China in 2019 and a third was approved in April this year to upgrade sustainable public health infrastructure and provide emergency supplies to fight the pandemic.

    The issuance has boosted the CIBM market as well as global investor base for the AIIB, allowing investors to access the world's "second largest bond market in the world in terms of outstanding volume," Kun added

    The AIIB appointed Bank of China as lead underwriter and bookrunner, with BNP Paribas's China division, China Construction Bank Corporation, China International Capital Corporation Ltd and the UK's HSBC Bank's China wing as joint underwriters by May this year.

    Crédit Agricole Corporate and Investment Bank Ltd, the world's largest cooperative financial institution, was appointed as a financial advisor on sustainability, the bank said.

    The bank's environmental and social framework have been created to allow clients to meet commitments under the Paris Agreement on climate change and UN Sustainable Development Goals.


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    BNP Paribas, People's Bank of China, Beijing, China, finance, issuance, foreign investment, investment, bonds, Asian Infrastructure Investment Bank (AIIB)
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