Agricultural Development Bank of China (“ADBC”) successfully priced CNH 2.5 billion 3-year and CNH 1.8 billion 5-yr fixed-rate senior unsecured bonds on 4 August. With combined orderbooks of 11.4 billion at its peak and oversubscription ratio of 3.82x, the deal was upsized from the originally planned 3 billion in total to 4.3 billion. The bonds were priced at reoffer yield 2.6% for the 3-year and 2.85% for the 5-year, which was 55bps/51bps tighter than the secondary market yield curve of onshore comparable bonds with similar tenor on the pricing day. This transaction marks ADBC’s first benchmark new issue in 2020 and the first CNH bond issuance from a Chinese policy bank following the first Dim Sum bonds offering by the Ministry of Finance of the People’s Republic of China in 2020. The net proceeds will be used for general corporate purposes which includes aspects of supporting China’s domestic and international development, strengthening pandemic prevention and control and stimulating the economic recovery and rural revitalization. Listing venues include the Hong Kong Stock Exchange, the ChongWa (Macao) Financial Asset Exchange (MOX), the Luxembourg Stock Exchange, the London Stock Exchange and the China Europe International Exchange. The Joint Global Coordinators of the transaction are Bank of China, Standard Chartered Bank and Bank of Communications and the Joint Bookrunners are Agricultural Bank of China Limited Hong Kong Branch, ABC International, China Construction Bank (Asia), ICBC (Asia), SPDB International, CLSA, Mizuho Securities, Crédit Agricole CIB, CTBC Bank, KGI Asia and DBS Bank.

China is currently leading the post COVID-19 economic recovery internationally, while the world is still facing lingering uncertainties around the pandemic and economic development. Under this backdrop and amid low interest rates environment, bonds issued by Chinese issuers have become more and more popular among global investors given the credit strengthen and attractive yields. With its quasi-sovereign credit quality, this bond issuance from ADBC received overwhelming response from high quality investors across HK SAR, Taiwan (China), Singapore, Japan, UK. France, Germany, Switzerland, Denmark, Luxembourg, US (offshore) and Canada. The diversified investor base covered Central Banks, Sovereign Wealth Funds, Banks, Securities Houses, Insures, Funds and Asset Managers. It demonstrates the strong confidence the international investors have in China’s economy as well as the continued recognition of ADBC and its bonds in international capital markets.

In response to the downward pressure in the world economy and the challenging market environment globally, China is accelerating the formation of a “dual cycle” development pattern to drive its economic growth. China will rely on both domestic and international cycle, with the domestic cycle being the main focus. It also aims to establish a medium to long-term coordination mechanism for pandemic prevention and control and economic and social development. ADBC as one of the policy banks in China, is dedicated to providing financial support to assist the Chinese government in achieving its objectives. Key areas of focus for ADBC remains in rural revitalization, including the production and supply of important agricultural products, improvement of the basic conditions in rural areas, poverty alleviation, ecological environmental protection and the development of public health system. It also strives to ensure the stable and steady domestic economic growth and to enhance financial markets connectivity. In terms of bond issuances, ADBC continues to actively promote its bonds onshore and offshore by enriching offering varieties, expanding issuance channels, developing innovative features and improving market infrastructure. By doing so, ADBC ensures the efficient and effective financing support to the real economy, especially the activities around “agriculture, rural areas and farmers". Through the years, ADBC has issued more than 10 trillion RMB bonds onshore, and contributed significantly to the establishment and development of “BondConnect”. ADBC believes that the ongoing efforts to further open up China’s financial markets will provide greater convenience and flexibility for international capital to capture opportunities in China's growth story.

Going forward, ADBC will further strengthen its funding capacity to support the pandemic prevention and control and to carry out its policy bank responsibilities to develop China’s agricultural and rural sectors. It will also embrace the ever-evolving market environment with an innovative mind-set to provide market participants with diversified products offering and to further promote RMB’s internationalization.