Fixed Income Pulse: ICBC London Branch becomes the first Chinese bank to issue a sterling bond

Fixed Income Pulse: ICBC London Branch becomes the first Chinese bank to issue a sterling bond

Industrial and Commercial Bank of China (ICBC), acting through its London branch, successfully issued a three-year GBP 600m bond on London Stock Exchange’s International Securities Market. The issuance is the first ever GBP- denominated public bond offering by a Chinese bank – an important milestone for the sterling bond market and Asian issuers.

ICBC, China’s largest commercial bank, continues to be at the forefront of innovation within debt capital markets. In 2018, ICBC issued its second Certified Climate Bond through their London Branch, which received the Green Bond Pioneer Award in 2019 and is currently the largest green bond listed on London Stock Exchange.

The GBP benchmark transaction was announced on 24 July 2019 with initial pricing of UK Gilts + 115-120bps. With a large reverse anchor order from an Asian investor and a positive response from accounts through Asian market hours, the orderbooks were announced north of GBP 400m at the UK open. As momentum continued, orderbooks reached above GBP 900m and the issue was increased in size to satisfy orders. The GBP 600m transaction was subsequently launched at UK Gilts +108bps - a spread tightening of 7-12bps from IPTs – achieving attractive pricing in line with ICBC London’s targets.

The success of ICBC’s debut public sterling bond highlights a strong appetite for Chinese credit from UK, European and Asian investors. The issuance received particularly strong demand from UK investors and the final orderbook was allocated 50% to UK & Ireland. Overall, more than 40 different investors participated in the transaction.

Accessing London’s capital markets has enabled ICBC London Branch to diversify its investor base by tapping into new funds and establish a benchmark for future sterling issuances by non-UK issuers.
The listing of this landmark bond further highlights London Stock Exchange’s status as a partner of choice for Chinese issuers looking to access international capital, and the UK’s strengthening economic and financial relationship with China.
London has hosted many landmark issuances from Greater China, including the largest ever green bond listing on London Stock Exchange, the first sustainability bond on London Stock Exchange’s International Securities Market, and the first international green bond and green covered bond from China. ICBC London Branch is one of 18 Chinese issuers to have issued a bond on London Stock Exchange, raising a combined $16.5bn.

Download the Debt Capital Markets Update - Q2 2019.

For further information, please visit our website, or send us an email at or call +44 (0)207 797 3921