Linklaters advises the People’s Bank of China on its RMB 5bn bills in Hong Kong SAR

Linklaters acted as international legal advisor to the People’s Bank of China (PBOC) on the successful offering of its RMB 5bn 6-month bills in Hong Kong through the CMU BID Service operated by the Hong Kong Monetary Authority (HKMA), with an interest rate of 2.50%. This is the eighth bill issuance by PBOC in Hong Kong in 2021, with the total amount issued reaching RMB 120bn.

Amid the backdrop of a sluggish global economy and the spread of the Omicron Covid-19 variant in many parts of the world, the RMB bill offering in Hong Kong was well received by institutional investors such as banks and funds from the US, Europe and Asia, as well as a number of international financial organisations. The total bid amount reached RMB 22.2bn, representing 4.4 times the issuance amount – a reflection of strong investor appetite in RMB assets and the confidence of global investors in China’s economy.

The successful issuance has contributed to the diversification of RMB investment products and liquidity management tools in the Hong Kong market. It has also paved the way for other mainland Chinese financial institutions and enterprises to issue RMB bonds in offshore markets.

The Linklaters team was led by Asia Managing Partner William Liu and capital markets partner Sherry Cui.

As PBOC’s international legal advisor, Linklaters has advised on all offshore offerings of central bank bills by PBOC, including the central bank’s first offering of bills in London in 2015 and all of its RMB bill offerings through public tendering on the HKMA’s platform since November 2018. A total of 38 tranches have been issued to date, with an aggregate issuance size of RMB 445bn.

Asia Managing Partner William Liu, commented:

“We are honoured to assist PBOC as its international legal advisor in issuing the central bank bills to international investors, and to have played a part in the continuous development of the offshore RMB markets.”