The decision to list its inaugural green bond in London highlights China’s recent efforts to build closer bilateral financial ties with the United Kingdom.
BEIJING: China kicked off its first-ever sale of a green sovereign bond, as it looks to raise as much as six billion yuan (US$826mil) in an offering it plans to list in London.
The Chinese Finance Ministry set the initial price guidances of the three-year and five-year offshore yuan-denominated notes at yields of 2.3% and 2.35%, according to a person familiar with the matter.
The notes could have been priced as early as yesterday, the person added.
The decision to list its inaugural green bond in London highlights China’s recent efforts to build closer bilateral financial ties with the United Kingdom.
China’s government earlier held an investor conference in the city and has ambitions of tapping a European market that’s the world’s largest buyer of sustainable debt.
“Even the opportunity to have a meeting, that’s unprecedented,” said Xuan Sheng Ou Yong, sustainable fixed-income lead for Asia-Pacific at BNP Paribas Asset Management in Singapore.
It’s rare for investors to have opportunities to engage with the nation’s Finance Ministry “to talk about its plans, the state of the economy and its decarbonisation strategy,” he said.
The debt issuance plan was first made public in January, when the UK Chancellor of the Exchequer visited Beijing and both countries pledged to enhance financial cooperation and boost capital market partnerships.
It also comes as China ramps up offerings in overseas markets, including a US$2bil bond sale in Saudi Arabia in November and a €2bil (US$2.2bil) deal in Paris in September.
While global issuance of green bonds slowed in the final three quarters of 2024, Chinese entities are the largest issuers of the notes so far this year, data compiled by Bloomberg Intelligence showed.
China, the world’s top polluting nation, is on track to peak its greenhouse gas emissions and do so ahead of a 2030 deadline.
The nation is pursuing a range of initiatives to accelerate decarbonisation.
Theses include work to expand the country’s emissions trading market and to extend its rapid uptake of renewable energy, Premier Li Qiang said in an annual work report last month. — Bloomberg
