Bank of China (BoC) becomes first Chinese Financial Institution to list a Green Bond on the Luxembourg Stock Exchange (LuxSE)

On July 13, 2016, the Luxembourg Stock Exchange (LuxSE) listed, and admitted to trading on its Euro MTF market, four green bonds issued by the BoC. The bonds were issued by BoC under its US$20,000,000,000 Medium Term Note Programme. Proceeds raised from the issuance of these green bonds will be used to finance projects that will promote renewable energy, pollution prevention, clean transportation and sustainable water management.

With a total issue amount of $2.8 Bn, the bond issue is made up of four different series :

• XS1437622621 U.S. $750,000,000, Floating Rate Notes due 2019
• XS1437622548 U.S. $500,000,000, 1.875 per cent. Notes due 2019
• XS1437622977 U.S. $1,000,000,000, 2.250 per cent. Notes due 2021
• XS1437623355 EUR 500,000,000, 0.750 per cent. Notes due 2021

BoC established its market leadership in the European bond market in 2014 with the ‘Schengen Bond’, becoming the first Chinese Financial Institution to list an offshore RMB Bond in Europe. With the present listing, BoC continues its Schengen Bond series as a first mover among Chinese Banks by becoming the first Chinese Financial Institution to issue a Green Bond on the European Continent and list on the LuxSE. Of equal importance, BoC demonstrates its commitment to Green Finance and environmental responsibility and sets a standard for the global Green Bond market with this listing, by becoming the first bank to list multiple Green Bond tranches simultaneously under a single programme.

This listing further confirms LuxSE’s position as the natural home of Green Bonds and LuxSE’s commitment to promoting the development of Green Finance and socially responsible investment. It demonstrates LuxSE’s capability to bring further scale to the Green Bond market and its strong commitment promoting the evolution of the Green Bond market in line with the industry best practices.
An event to mark this achievement was held by LuxSE in the presence of the Luxembourg Minister of Finance, Pierre Gramegna, Mr. Huang Changquing, Chinese Ambasador to Luxembourg and representatives of BoC and LuxSE.

Comments on the issue :

Julie Becker, Executive Committee Member of the Luxembourg Stock Exchange, said :

Today we celebrate a tangible milestone in achieving our role in facilitating the financing of the global transition towards a low carbon economy. We welcome Bank of China’s entrance into this segment, and commend them for showing their leadership in capital markets innovation. LuxSE provides issuers with proven solutions for optimisating of Green Bond disclosure and investors with innovative assesment solutions. ’’

Mrs. ZHOU Lihong, CEO at Bank of China in Luxembourg said :

“Today we reached another milestone in Bank of China’s Bond issuance history. Following the launch in 2014 of the first offshore RMB Bond by a Chinese entity in Continental Europe, the ‘Schengen Bond’, Bank of China Luxembourg Branch continued on this path by joining forces with Bank of China Head Office and successfully launched the ‘Green Schengen Bond’ on July 5th, 2016.
This represents the very first Green Bond issued by Bank of China and the first Green Bond offering from Asia to be made in Europe.
Despite the news about the ‘Brexit’ and the turmoil left in the financial markets, Bank of China succeeded to launch the biggest international debt sale of its kind, proving once again its attractiveness to and high recognition from professional investors.
The Green Schengen Bond is an excellent demonstration of Bank of China’s determination to promote the green bond market development in Europe through its Luxembourg branch and our bank’s strong wish to continuously support Luxembourg in it’s strive to remain the leading Green Bond listing centre.’’

Pierre Gramegna, Luxembourg Minister of Finance said :

“The Luxembourg Government is strongly committed to the double objective of assuming a meaningful contribution to the global fight against climate change and continuing the development of Luxembourg as an international hub for climate finance. As a leading financial center in the heart of Europe with a global outlook and well established market expertise, Luxembourg plays a pivotal role in the funding of green entrepreneurship, supporting the growing market for green bonds and ensuring appropriate transparency. The LuxSE is well prepared to assume its role as a trustful partner offering the necessary guarantees for issuers and investors with a scope on sustainable development.”

About the Luxembourg Stock Exchange (LuxSE)

With 40,000 listed securities, including some 26,000 bonds, from 3,000 issuers in 100 countries, LuxSE is the world’s number one exchange for the listing of international securities and offers a unique full service throughout listing, trading and reporting. LuxSE operates two markets : an EU regulated market (“Bourse de Luxembourg”) and an exchange-regulated market (“Euro MTF”). All securities are tradable on Euronext’s UTP platform. LuxSE also operates a specialist subsidiary, Fundsquare, which provides services to substantially support and standardize cross-border distribution of investment funds.
More information on www.bourse.lu

LuxSE is the world leader for the listing of green bonds. As the leading stock exchange in the world for the listing of green bonds with more than 110 listings and as a capital markets intermediary committed to a sustainable economy, the Luxembourg Stock Exchange (LuxSE) facilitates access to green bond instruments for an increasing number of issuers, bearing in mind both the importance of appropriate disclosure for the integrity of the asset class at the service of investors specific environmental and performance goals and the opportunity to help green issuers with different fund-raising capabilities raise money in a most efficient way. We voluntarily participate in several initiatives, through dialogue with ICMA GBP, the Sustainable Stock Exchanges Initiative (SSE), the World Federation of Exchanges (WFE), Climate Bond Initiative (CBI), the European Commission, the Luxembourg Government as well as issuers and investors, to promote long-term sustainable investment and improved environmental, social and corporate governance disclosure and performance among companies listed on our exchange.
Please visit our green bond page on www.bourse.lu/listing-green-bonds

About Bank of China Limited, Luxembourg Branch

Bank of China Limited, Luxembourg Branch is a sub-branch of Bank of China Limited, China’s most internationalised and diversified bank. Bank of China Limited provides a comprehensive range of financial services to customers across the Chinese mainland as well as in 41 countries and regions. The Bank’s core business is commercial banking, including corporate banking, personal banking and financial markets services.
Bank of China Limited, Luxembourg Branch was the first Chinese Bank established in Luxembourg in 1979. It was also the first banking branch established overseas by China after founding the People’s Republic of China. In 1991, Bank of China Group incorporated its first wholly-owned European subsidiary “Bank of China (Luxembourg) S.A.” which in turn has expanded the network to other EU countries over the years, opening branches in Rotterdam, Brussels, Warsaw, Stockholm and Lisbon.
In recent years, Bank of China Luxembourg has expanded its business to reach new heights, and has achieved a predominant RMB market share in Luxembourg. In 2014, the bank became the first Chinese company not only to launch an offshore-RMB bond (called Schengen Bond) in Luxembourg and in the Eurozone, but also to list it at the Luxembourg Stock Exchange. In 2015, the Bank successfully became the first Luxembourg-based RQFII with approved license and quota, and incorporated an umbrella investment company “BOC (Europe) UCITS SICAV”.

Today, as the Group’s European Regional Hub and European Asset Management Platform, the Bank provides a full range of comprehensive banking products and services tailored to meet the needs of its corporate, financial institutions and private clients. Standing as a group of 7 institutions in 6 countries, the Bank has over 190 employees of more than 15 different nationalities.

Communiqué par Luxembourg Stock Exchange et Bank of China Limited