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China Construction Bank Corporation Issues its maiden ESG-themed “Transition Bond” in Singapore, raising RMB 2 billion
Published time: 2021-04-16

China Construction Bank Corporation issued three ESG-themed bonds worth a total of USD 2.4 billion in Singapore, Hong Kong and Luxembourg respectively

 

The RMB 2 billion senior “Transition Bond” was the first of such bond issued overseas by China Construction Bank Corporation through Singapore Branch and to be listed on SGX

 

Singapore, as an important market for offshore RMB, provided a conducive market environment for the successful issuance of the bond

 

The bond will provide an additional avenue for investors in Singapore and the region to participate in major ESG projects in China

 

 

April 16, 2021, Singapore – China Construction Bank Corporation (“CCB” or the “Group”) announced today that it has issued three ESG-themed bonds worth a total of USD 2.4 billion in Singapore, Hong Kong and Luxembourg respectively on April 15, 2021. Among which, the Group issued a RMB 2 billion, 2-year senior “Transition Bond” with its Singapore Branch as the issuer (“the Transition Bond”). The bond will be listed both on the Singapore Exchange (“SGX”) and Hong Kong Stock Exchange on April 22, 2021.

 

The issuance of the Transition Bond in Singapore marked the first of such bond that CCB has issued in the overseas market, and it was also the first to be issued through Singapore Branch and to be listed on SGX. The bond issuance in Singapore demonstrated that CCB highly valued Singapore as an important offshore RMB centre and capital market, and also the strategic significance of Singapore Branch to CCB Group. CCB Singapore Branch plays an instrumental role in serving both Chinese and local customers in Singapore and was awarded a Qualifying Full Bank (“QFB”) licence by the Monetary Authority of Singapore in December 2020.

 

The bond provided an additional avenue for investors in Singapore and the region to participate in major ESG projects in China. The issuance was well received by investors, including commercial banks, funds, asset managers, insurance companies and high net worth individuals from many countries and regions. The bond was priced at a coupon rate of 2.85%, after achieving a tightening of 30 bps from the initial price guidance.

 

“Transition Bonds” refer to bonds that support transition projects in traditional, carbon-intensive industries in their decarbonisation efforts. The bond aims to provide financial resources to selected projects, which will collectively contribute to China’s economic transition goal for its carbon emissions to peak by 2030 and to achieve carbon neutrality by 2060. 

 

CCB plans to use the funds raised in the “Transition Bond” issuance in selected projects in the eligible project pool that covers power, gas, steam, manufacturing and steel industries. Specifically, some projects are designed to lower carbon emissions by upgrading natural-gas-based energy distribution stations, or upgrade waste heat recovery and power generation system. 

 

CCB has come a long way in promoting ESG concepts and strategies in recent years through green financing and green investments. The issuance of the three ESG-themed bonds globally is an important step in implementing its ecological and environmental protection strategy and promoting sustainable financing as part of its social responsibility.  

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