CICC Assists CCB in Issuing USD1.85bn Offshore Tier 2 Bond

On February 27, 2019, CICC, acting as the Global Coordinator, assisted China Construction Bank Corporation (“the Issuer” or “CCB”) to successfully complete its USD1.85bn 10-year non-call 5-year offshore Tier 2 bond issuance at a coupon of 4.25% (“the issuance”). This issuance marks the capital instrument in the international market issued by Chinese large-scale state-owned commercial bank in the name of head office, once again after a 4-year period; and also marks the lowest level of spread of offshore capital instruments issued by Chinese commercial banks, as another landmark transaction in international capital market.

Established in October 1954, CCB is a leading state-owned large-scale joint stock commercial bank in China and headquartered in Beijing. It was listed on Hong Kong Stock Exchange in October 2005 (stock code: 939) and on Shanghai Stock Exchange in September 2007 (stock code: 601939). CCB dedicates to building a world class banking group with the capability of creating top value, provides services to hundreds of millions of personal and corporate customers, and maintains close cooperation with leading enterprises in strategic industries in the Chinese economy and numerous high-end customers.

CICC is exclusively responsible for the communication with regulatory and deeply involved in the execution work. Finally based on outstanding execution abilities, CICC successfully helped CCB to accurately grasp the optimal issuance window to launch the transaction after Chinese Spring Festival with market risk weakening, good liquidity and strong demand in the market. Also CICC accompanied CCB to launch roadshow for global investors from Europe, Asia and etc., covering diversified investor groups. The excellent marketing strategies laid a solid foundation for the successful issuance.

On the pricing day, launched with an initial price guidance of T5+220bps area, the bond offering attracted a great number of sovereign funds, high-quality large international institutions to subscribe. Based on strong order book, the issuance’s final price significantly narrowed 32bps which is one of the largest narrowing scales among recent investment-grade bond issuances. The book exceeded USD6.5bn, leading to a 3.5x over-subscription. For investors’ geographical distribution, foreign institutions accounted more than 50% in the total subscription. This deal can be regarded as landmark transaction in recent Asian bond market from the perspectives of issuance size, pricing level and investor’s diversification.

CICC has formally signed the comprehensive strategic cooperation agreement with CCB and has been deeply involved in multiple major projects of CCB in capital markets, including restructuring, H-share IPO, A-share IPO, offshore senior USD bonds and onshore Tier 2 capital instrument, and has a long-term profound cooperation relationship with CCB.