A RMB2 billion ($0.41 billion) 2-year senior transition bond from the China Construction Bank (CCB) is set to be listed on the Singapore and Hong Kong stock exchanges on April 22.
This bond, which has a focus on environment, social and corporate governance (ESG), will support transition projects in traditional, carbon-intensive industries in their decarbonisation efforts.
The funds generated from the bond will go towards projects that contribute to China’s goals for carbon emissions to peak by 2030 and to attain carbon neutrality by 2060, CCB details in its April 16 announcement.
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For instance, some of these projects will look to lower carbon emissions by upgrading natural-gas-based energy distribution stations, or upgrade waste heat recovery and power generation system.
This bond marks CCB’s first issuance on the Singapore Exchange with its Singapore Branch as the issuer and comes as the republic is deemed an important offshore RMB centre and capital market.
The bank’s Singapore branch which serves both Chinese and local customers in Singapore, was awarded a Qualifying Full Bank (QFB) license by the Monetary Authority of Singapore in December.
A QFB allows banks to provide the whole range of banking services.
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The issuance follows placements from investors, including commercial banks, funds, asset managers, insurance companies and high net worth individuals from many countries, CCB reports.
The bond was priced at a coupon rate of 2.85%, after achieving a tightening of 30 basis points from the initial price guidance.
The Singapore-based bond is among the three ESG-themed bonds CCB is offering. The other two bonds will be offered in Hong Kong and Luxembourg.
Collectively, the bonds will amount to US$2.4 billion ($3.21 billion).
