Brics bank to issue $448m of yuan green bonds

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Brics bank to issue $448m of yuan green bonds

9:26 CAT | 13 Jul 2016

Reuters / Vladimir Putin (left), Narendra Modi (third left), Dilma Rousseff (centre), Xi Jinping (fourth right) and Jacob Zuma attend a Brics summit in Russia. Cementing trade relations with Brics is one thing. Shaping our foreign policy to align with them is quite another.

The New Development Bank (NDB), established by the Brics (Brazil, Russia, India China and SA) group of emerging nations, plans to sell 3-billion yuan ($448.37m) of yuan-denominated, green bonds in China’s interbank market.

The green bonds will be issued on July 18 with a five year tenor and will be the first such issuance by a bank of its type under guidelines issued by China’s central bank in December, according to a news release sent to Reuters.

The Bank of China is the lead underwriter and book runner for the issue, while joint underwriters include the Industrial and Commercial Bank of China, China Construction Bank, HSBC Bank (China), and Standard Chartered Bank (China).

Bond proceeds will be used to finance green projects in Brics countries, the press release said.

“The NDB intends to obtain an international credit rating to broaden its access to global capital markets,” said NDB chief financial officer Leslie Massdorp.

The bank will also issue bonds in other member currencies in order to mitigate the foreign currency risk of funded infrastructure projects and help develop local currency fund-raising markets, a vice director of the bank said in June, speaking at the Lujiazui Forum in Shanghai.

Brics officially grouped together in 2009 to press for a bigger say in global financial matters, and the NDB, which is headquartered in Shanghai, started work last year.

Source: Reuters