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Clifford Chance advises Bank of China on issuance of US$3 billion 144A Additional Tier 1 capital securities

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26 September 2018

Clifford Chance advises Bank of China on issuance of US$3 billion 144A Additional Tier 1 capital securities

Leading international law firm Clifford Chance advised the Bank of China (Hong Kong) Limited on the issuance of US$3 billion undated non-cumulative subordinated Additional Tier 1 capital securities under its recently updated US$15 billion medium term note programme and the tender offer to repurchase US$876 million of the US$2.5 billion 5.55% subordinated notes due 2020.

The Capital Securities are intended to qualify as Additional Tier 1 capital pursuant to the Banking (Capital) Rules (Cap. 155L) of Hong Kong and were offered under Rule 144A and Reg S to Qualified Institutional Buyers in the US and to investors outside of the US, respectively.

The offering of the Capital Securities is the largest 144A Additional Tier 1 deal globally since 2015 and the largest single tranche Additional Tier 1 deal globally in 2018 to date.

Connie Heng, Head of Capital Markets in Asia Pacific led on the deal and said, "We were delighted to assist Bank of China on this strategic issuance and tender offer. We hope the offering of the Capital Securities will reopen the offshore Additional Tier 1 market for other Chinese bank issuers."

Connie was supported by partners Alex Lloyd and Virginia Lee, consultant Mark Chan, associates Joshua Damm, Jeffery Hung, trainee solicitor Grace Fung and paralegal Michelle Leung.

Alex commented, "Bank of China saw an opportunity to take out some of their existing Tier 2 subordinated notes and they did so through an abbreviated tender offer so US holders could participate."

Clifford Chance has acted on key Hong Kong regulatory capital issuances since the Financial Institutions (Resolution) Ordinance became effective in 2017 including for Chiyu Bank, Chong Hing Bank, Shanghai Commercial Bank and Wing Lung Bank.

高伟绅代表中国银行根据144A规则发行30亿美元的额外一级资本债券

国际领先律师事务所高伟绅为中国银行(香港)有限公司在其近期更新的150亿美元中期票据计划下发行30亿美元的无到期日非累积次级额外一级资本证券,以及通过要约回购于2020年到期、息率为5.55%的25亿美元次级票据中的8.76亿美元次级票据项目提供法律服务。

资本证券将符合香港《银行业(资本)规则》第155L章定义的额外一级资本,并根据144A规则向美国的合格机构买方发售,以及根据S条例向美国境外的投资者发售。

本次资本证券发行是自2015年以来全球根据144A规则发行规模最大的额外一级资本发行项目,同时是2018年至今全球最大的单笔额外一级资本交易。

本项目由高伟绅亚太区资本市场业务组主管王彦琳领导,由合伙人Alex Lloyd和李婉雯、资深顾问律师陈方中、律师Joshua Damm和孔靖、实习律师冯可欣和律师助理梁怀恩提供支持。

王彦琳律师表示,“我们非常荣幸能够为中国银行在本次战略性发行和要约交易中提供法律服务。我们希望此次资本证券的发行将为其他中资银行发行人再次打开境外额外一级资本的市场。”

Alex Lloyd表示,“中国银行在其现有的二级次级票据中发现了机会,通过简单要约为美国持有人提供参与二级次级票据投资的机会。”

自《金融机构(处置机制)条例》于2017年生效以来,高伟绅已经为多项重要香港监管资本发行交易提供了法律服务,客户包括集友銀行、创兴银行、上海商业银行和永隆银行。