Bank of China Facilitates Chinese Ministry of Finance's Successful €5 Billion Sovereign Bond Issuance in Luxembourg

The Chinese Ministry of Finance, with Bank of China acting as the lead underwriter, successfully issued a 5 billion euro sovereign bond in Luxembourg on June 25th.

The issuance comprised three tranches: a 2.5 billion euro 5-year bond with a coupon rate of 2.768%, a 1.5 billion euro 8-year bond at 2.966%, and a 1 billion euro 12-year bond at 3.212%.

The bond offering was met with strong market demand, attracting total orders of approximately 24.8 billion euros, which is nearly five times the final issuance size.

The investor base for this euro-denominated sovereign bond was diverse in both type and geographic distribution.

By region, Asian, European, Middle Eastern, and US offshore investors accounted for 51%, 28%, 18%, and 3% of the orders, respectively.

By investor type, sovereign wealth funds, banks, fund and asset managers, and dealers comprised 24%, 57%, 17%, and 2% of the allocation.

The bonds will be settled through the Hong Kong Monetary Authority's Central Moneymarkets Unit (CMU) and are scheduled to be listed on both the Hong Kong Stock Exchange and the Luxembourg Stock Exchange.

Since the Ministry of Finance began its regular program for issuing foreign currency sovereign bonds in various currencies like US dollars and euros, Bank of China has participated as the lead underwriter in all such offshore issuances.

Leveraging its global network and expertise in debt capital markets, the bank has supported issuances across major financial centers including Hong Kong, London, and Luxembourg, establishing a comprehensive, industry-leading service framework for the entire lifecycle of foreign currency sovereign bonds.

Specifically, Bank of China has been involved in all seven US dollar sovereign bond issuances by the Ministry of Finance since the inaugural book-built offering in Hong Kong in 2017, with cumulative issuance exceeding $25 billion.

Similarly, the bank has participated in all six euro sovereign bond issuances since the program's Paris debut in 2019, with total issuance surpassing 20 billion euros.

Bank of China has stated its commitment to continue utilizing its global reach and integrated capabilities to support the Ministry of Finance's offshore sovereign bond program, aiming to contribute further to the advancement of high-level financial openness.