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'BRICS bank' NDB to sell Green renminbi bonds

14 July 2016


HONG KONG, July 14 (IFR) - The New Development Bank, the multilateral institution set up last year by the five BRICS countries, is to sell 3 billion renminbi ($449 million) of five-year green bonds next Monday in China's interbank bond market.

It will be the bank's first debt issue after it was launched last July.

Both the issuer and the bonds have received ratings of AAA from China Cheng Xin International Credit Rating.

It intends to use the proceeds for green projects in its member countries and has received approval from the People's Bank of China to use the proceeds onshore and offshore.

NDB plans to raise 10 billion renminbi from debt issuance from 2016-2017, it said in the prospectus.

Bank of China is the lead underwriter and sole bookrunner for the Rmb3bn offering. China Development Bank, China Construction Bank, HSBC (China), ICBC and Standard Chartered Bank (China) are joint lead underwriters.

NDB has an initial capital of $50 billion equally funded by the five members: Brazil, Russia, India, China and South Africa.

Market sources said ambiguity initially rose over the nature of the bonds issued by NDB in China, given that it is an international institution but is headquartered in Shanghai.

By the rule of incorporation, market participants say NDB's renminbi bond is not a Panda bond.

Having its headquarters in Shanghai helps NDB to access China's cheap onshore funding in a much faster and easier fashion than other international institutions whose renminbi fundraising plans are hindered by hurdles over financial statements, which need to conform to Chinese standards.

International Finance Corporation and Asian Development Bank were the first and the only two international institutions that issued Panda bonds in China. (Reporting by Ina Zhou; editing by Daniel Stanton)

Original Article :
http://af.reuters.com/article/southAfricaNews/idAFL4N1A01BS