Linklaters advises the PRC government on its US$2bn Rule 144A and Reg S sovereign bond issuance
Linklaters advised the Ministry of Finance of the People’s Republic of China (MOF) on its recent issuance of US$2bn Rule 144A and Reg S sovereign bonds. Linklaters continued to act as the MOF’s international legal advisor on this issuance – marking the first time that the MOF has conducted roadshows in the Middle East and priced sovereign bonds in Riyadh as well as the debut of PRC sovereign bonds being listed on Nasdaq Dubai. The bonds are also listed on the Hong Kong Stock Exchange.
This issuance comprised two series, including US$1.25bn 3-year bonds with a yield of 4.284% and US$750m 5-year bonds with a yield of 4.340%. The yield spreads of these two series over U.S. Treasury of the corresponding maturities were tightened to 1bps and 3 bps, respectively, which was an unprecedented low in the US dollar bond market.
Strong demand came from a wide range of international investors such as sovereign investors, banks, funds, asset managers, insurance companies and dealers across various jurisdictions. The bonds were oversubscribed by 19.9 times, with the 5-year being oversubscribed 27.1 times, setting a new global record for sovereign bond issuance in recent years.
The Linklaters team was led by Asia Managing Partner William Liu and Hong Kong SAR-based capital markets partner Min Fang. The cross-jurisdictional team also included Dubai-based capital markets partner Dalia Nammari and Riyadh-based corporate partner Amro Bakhaidar.
Linklaters’ Asia Managing Partner William Liu commented:
"It is a great honour to participate in this landmark transaction. This successful sovereign bond offering not only further strengthens China’s cooperation with the Middle East, but also testifies to the strong confidence global investors place in China’s sovereign credit and economic outlook. As a leading international law firm, we will continue to fully leverage our global network and utilise our market-leading expertise across the firm to support China’s high-standard opening-up.”
