Clifford Chance

Clifford Chance advises China Merchants Bank on landmark issuance of US$600 million sustainability and green bonds

Leading international law firm Clifford Chance recently advised China Merchants Bank, through its Luxembourg branch, in connection with the issuance of a landmark dual-tranche sustainability and carbon neutrality bonds totalling US$600 million. This is the first-ever dual-tranche sustainability and green bond from a Chinese issuer to be listed on the Luxembourg stock exchange.

The offering was also China Merchants Bank’s first carbon neutrality-themed green bond to help drive China’s emission and carbon neutrality commitments. The green bonds, equally split at US$300 million each, included a two-year floating-rate sustainability bond linked to the secured overnight finance rate. The second tranche was a five-year fixed rate carbon neutrality themed green notes due 2026.

Credit Agricole CIB, JP Morgan, Citigroup, CMB International, CMB Wing Lung Bank Limited, and Agricultural Bank of China Limited (Hong Kong branch) acted as underwriters.

The Clifford Chance team was led by partner Angela Chan who was supported by senior associate Clarisse Fong (Singapore) and associate Anthony Lau (Hong Kong).

Commenting on the transaction Angela said, “We are honoured to have had the opportunity to work with China Merchants Bank on this landmark transaction in China’s efforts to boost its sustainability and ESG commitments. The market reception of the transaction and the strong interest in the financing are a testament to the ever-increasing focus of companies and countries on minimising carbon emissions and increasing sustainable financing. We expect similar transactions to occur in this space.”