Agricultural Bank of China issued a CNY 20 billion green financial bond in China's interbank market on 3 August, pricing the three-year paper at a coupon of 1.51%, the lowest rate the state-owned lender has achieved on any of its green financial bonds.
The transaction included an upsize mechanism. On top of a base amount of CNY 10 billion, the bank fully exercised a further CNY 10 billion increase option, bringing the final issue size to CNY 20 billion. The overall subscription multiple was 1.6 times, the bank said.
BROAD DOMESTIC DEMAND
Investors in the deal included large state-owned banks, joint-stock banks, city commercial banks, rural commercial banks, insurance companies, securities firms and fund managers, according to the bank. The bank said it timed the issue to take advantage of the market window.
USE OF PROCEEDS
Proceeds will be applied, in accordance with applicable laws and regulatory requirements, to lending for green-industry projects defined in the Green Finance Supported Projects Catalogue (2025 Edition), the Chinese catalogue that sets out which activities qualify for green financing. The bank said the funds would also further support the development of its green finance brand.
Agricultural Bank of China said it would continue to strengthen its green finance product and service offering, increase its green lending and develop diversified green investment and financing business, as part of its contribution to the high-quality development of green finance in China.
The 1.51% coupon on this issue sets a new low for Agricultural Bank of China's green financial bond programme, with the upsized CNY 20 billion deal twice its original base amount.