Commonwealth Bank of Australia has priced China Development Bank’s inaugural offshore green bond, raising USD 500 million to support the implementation of the Chinese government’s green development initiatives and strategies.
Commonwealth Bank was joint lead manager and joint bookrunner in the landmark transaction, which marks the first offshore green bond for China Development Bank (CDB), the largest policy bank in China.
The proceeds from the bond will support the implementation of the Chinese government’s green development initiatives and strategies, including green energy, transport and water projects for the Chinese government’s Belt & Road Initiative (often referred to as One Belt One Road).
A spokesman for CDB Treasury and Financial Markets said “The successful issuance of the first international green bond by CDB is a major innovation in international capital markets. It highlights the advantages of CDB’s comprehensive financial product suite, promotes green development in the Belt & Road Initiative, and the flow between domestic and overseas bond markets”
Simon Ling, Managing Director of Debt Markets, Commonwealth Bank said: “We are thrilled to have played a part in supporting the green goals of the CDB, and will continue to work with our clients to grow the global green bond market.”
“This demonstrates there is sustained demand and support from global investors for green assets, particularly from policy banks like the CDB who are less frequent in the market. The strong order book also indicates the strength of Commonwealth Bank’s client relationships and our commitment to our clients in Asia.”
In FY17, Commonwealth Bank issued AUD 1.02 billion of climate bonds into capital markets.
This transaction was part of a dual-tranche transaction with a corresponding EUR green tranche, which raised EUR 1 billion of 4 year bonds. The bond priced at 5 year UST +78 basis points.