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ICBC Rings the Bell in Luxembourg Stock Exchange for Listing Its “Belt and Road” Climate Bonds

On October 30th, ICBC held a “ring the bell” ceremony in Luxembourg Stock Exchange to celebrate the official listing of its inaugural “Belt and Road” climate bonds successfully issued earlier with a total equivalent of USD 2.15 billion.

It was introduced that the bonds were issued in three tranches in USD and EUR with tenors of 3 years and 5 years. The use of proceeds will be dedicated to financing and refinancing the four eligible categories initiated by ICBC globally in renewable energy, low carbon and low emission transportation, energy efficiency, and sustainable water and wastewater management.

This issuance of climate bonds has achieved remarkable results in multiple aspects such as structuring, size, pricing, and investor composition, making a milestone transaction as a Chinese issuer in the international capital market. It marks the biggest single tranche in EUR-denominated green bonds by Chinese issuers, with tightened pricing levels. In terms of investor composition, European investors took over 70% in two 3-year tranches in EUR and USD. Not only ESG investors were attracted, but also diversification in sovereign funds, insurance companies and corporate investors.

Meanwhile, this climate bond issuance sets five market records. Firstly, ICBC Green Bond Framework incepted on September 25th has adopted the best-in-class approach as the first framework aligned with the latest international and domestic green bond standards. Secondly, it is also the first framework for a Chinese issuer to get the second opinion from CICERO (the Center for Climate and Environmental Research, Oslo), making ICBC the only Chinese issuer to date to receive “dark green” shading by CICERO. Thirdly, the green bonds issued are also the first certified climate bonds against the Climate Bonds Standards for Chinese financial institutions. Fourthly, the green bonds issued are also the first green issuance dedicated to green projects following the “Belt and Road Initiative”. Last but not least, the EUR tranche offering is also the largest EUR bond issued by a Chinese bank ever.

Whilst setting up the Green Bond Framework and structuring the inaugural green issuance, ICBC has committed to the best practice. Besides the second opinion by CICERO with a “dark green” shading against the Green Bond Principles, ICBC also engaged Beijing Zhongcai Green Financing Consultants Ltd. to provide external evaluation assurance against the Chinese green standards. Zhongcai also served as the CBI-approved verifier for ICBC’s inaugural issuance to obtain the Climate Bonds Certification.

It was introduced by ICBC that “green credit” has been a long-term strategy for the Bank, and that the Bank has been committed to building a leading international player in green credit with good international reputation by actively practicing the principles of “green development” and “green finance”. By the end of 2016, ICBC saw a lending balance of RMB 978.56 billion to energy-saving, environmental-friendly projects and services, taking 14.2% in all corporate lending, with its growth rate 6.8 percentage points higher that the overall growth of lending to corporates in China. ICBC is also the largest underwriting bank in green bonds in China.