(ATF) The Asian Infrastructure Investment Bank has priced its debut 3-billion-yuan panda bond offering as investors swarmed to buy into China’s relatively safe fixed income markets. Panda bonds are yuan-denominated bonds sold by non-Chinese issuers in China.
The China-backed AIIB, which has a top rating from all three global rating agencies, launched the deal with a price guidance of 2.3% to 2.9%.
Bank of China is the lead underwriter and book-runner, while BNP Paribas (China) Ltd, China Construction Bank Corporation, China International Capital Corporation Ltd and HSBC Bank (China) Company Ltd are joint lead underwriters and Crédit Agricole Corporate and Investment Bank (China) Ltd is the financial advisor.
The coupon was set at 2.4%, while the bid to cover ratio was 2.78% and marginal ratio was 2.08%, according to a term document seen by Asia Times Financial.
Net proceeds from the sale of the bonds will be included in the ordinary resources of AIIB, which also includes a Covid-19 Crisis Recovery Facility.
It is a US$5-10 billion facility, which will offer sovereign-backed and non-sovereign-backed financing for qualifying clients and projects within AIIB’s members.
Assistance to be provided in 3 key areas
AIIB’s immediate assistance, including under the Crisis Recovery Facility, will be provided in three key areas:
(i) immediate healthcare sector needs (including support for emergency public health responses and for the long-term sustainable development of the healthcare sector);
(ii) economic resilience; mainly where clients require financing to supplement government measures supporting the social and economic response and recovery efforts (including infrastructure investments and investments in social and economic protection measures to prevent long-term damage to productive elements of the economy and to protect and restore productive capital);
And (iii) investments in infrastructure and other productive sectors, mainly where clients might otherwise need to curtail long-term investments due to liquidity constraints.
