ICBC prints second green bonds in dual currency FRNs

First Chinese bank with green bond framework aligned with international and Chinese standards


Industrial and Commercial Bank of China (ICBC) on 5 June 2018 priced its second green bonds in dual currency amounting to US$1.58 billion equivalent.

The Reg S transaction consisted of a US dollar tranche totalling US$1 billion in floating rate notes (FRNs), equally split at US$500 million each for three years and five years. The three-year FRNs are priced at par with a similar coupon and re-offer spread of 73bp over the three-month Libor, which are 27bp tighter than the initial price guidance of 100bp area.

The five-year FRNs are priced at par with a similar coupon and re-offer spread of 83bp over the three-month Libor, which are also 27bp inside of the initial price guidance of 110bp area.

The other tranche is for 500 million euro (US$580 million) FRN for three years with a spread of 50bp over three-month euro, which is 20bp back of the initial price guidance of 70bp area.

The offering has obtained a Climate Bond Initiative certification from the Climate Bonds Standard Board on 28 May 2018. The external review opinion provider was Zhongcai Green Financing, with CICERO providing the second opinion.

The bonds are drawn under ICBC's US$10 billion medium term note programme and the proceeds will be used to finance and/or refinance eligible green assets under the green bond framework in renewable energy, energy efficiency, low-carbon/low-emission transportation, sustainable water and waste water management.

The deal marked the return of ICBC into the G3 green bond market after the landmark offering of its Luxembourg branch in September 2017 when it printed a US$2.15 billion equivalent US dollar and euro triple-tranche debut green bonds.

That transaction made ICBC the first Chinese bank with a green bond framework aligned with both the international standards and the Chinese framework, combining a second opinion from CICERO with the highest green shading "dark green" and an external review opinion from Zhongcai.

Credit Agricole CIB and HSBC are the joint green structuring agents for the latest transaction, as well as the joint global coordinators, along with Citi, ICBC, Mizuho Securities and Standard Chartered.

The joint bookrunners and lead managers for the deal are Agricultural Bank of China (Hong Kong), ANZ, Bank of America Merrill Lynch, Barclays, BNP Paribas, Cathay United Bank, China Minsheng Banking Corporation (Hong Kong), Commerzbank, Industrial Bank Company (Hong Kong), Societe Generale CIB and Wells Fargo Securities.

ICBC has developed a long-term strategy to be a leading and top-rated green financial institution. In accordance with green financing criteria, the bank has been innovative in the green financial products market and has underwritten a number of green bond offerings. By improving industrial credit policies, ICBC has promoted the development of industries involved in energy savings, emission reduction and environmental protection.

As at the end of 2017, the balance of green credit granted by the bank to green economic sectors such as ecological protection, clean energy, green transportation, industrial energy saving and environmental protection, and resource recycling amounted to almost 1.10 trillion renminbi (US$171.75 billion). This represented an increase of 120.6 billion renminbi at the beginning of the year – with the growth exceeding that of corporate loan balance during the same period by 3.5 percentage points.

Photo: Rudolf Simon


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7 Jun 2018


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