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BOCHK sets benchmark for new Yulan Bond market

It has priced US$500 3-year senior fixed bonds at T+67 bps.

Bank of China, Hong Kong (BOCHK) has priced the US$500m Reg S three-year senior fixed rate Yulan Bond at T+67 basis points (bps) at a reoffer yield of 0.859% whilst the coupon was set at 0.750%, according to a press release.

The transaction achieved the lowest reoffer spread, yield and coupon to date for a US dollar three-year fixed rate bond issue by a Chinese bank. 

Banking giant Citi acted as the joint global coordinator and bookrunner of the inaugural issuance of Yulan Bonds, and also provided custody services for the issue.

The final order book reportedly surpassed US$1.2b, over 2.4 times oversubscribed. More than nine in 10, or 94%, of bonds were allocated to Asia investors, whilst EMEA investors represented the remaining 6%.

Yulan Bonds are a new initiative created by Euroclear and the Shanghai Clearing House and named after the city of Shanghai’s official flower. They are designed to provide Chinese issuers with access to greater liquidity by connecting them with the global investment community, Citi noted in a press release.

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