On July 29, China Development Bank (“CDB”) issued the first “Bond Connect” green financial bonds under the theme of “Addressing Climate Change”, totaling CNY10 billion, to global investors on various markets simultaneously, including CNY1 billion issues by tender on the SZSE bond market. It is an important measure adopted by SZSE, in cooperation with CDB, to enrich the green financial product system and explore product interconnectivity on different bond markets.
The “Bond Connect” green financial bonds are certified by climate bonds standard, with a coupon rate of 2.4984%, and subscription ratio of 2.77 times. The raised funds will be used in green projects such as low carbon transportation, to effectively mitigate and curb climate change, reduce pollutant discharge, facilitate protection of the ecological environment, help win the critical battle against pollution and set a new model for development of green bond markets at home and abroad.
In recent years, SZSE has actively introduced cross-market issuance and innovation of CDB bonds, increased the supply of bond products featuring high credit ratings, continued to optimize the product structure of the exchange bond market, and expanded market depth and breadth. Since 2017, a total of CNY93.62 billion CDB bonds have been issued at SZSE, becoming a popular investment type on the exchange bond market.
The People’s Bank of China and the China Securities Regulatory Commission (“CSRC”) recently jointly released an announcement, approving interconnectivity cooperation between relevant infrastructure institutions in the interbank bond market and the exchange-traded bond market. The “Bond Connect” green financial bonds, which were issued by CDB in cooperation with domestic and overseas infrastructure institutions in the bond market across interbank markets, exchange markets and commercial bank over-the-counter markets simultaneously, is a useful practice of exploration on interconnectivity of bond products. Next, SZSE will, under the unified leadership of CSRC, implement the requirements on interconnectivity of financial infrastructure, and speed up business and technological preparations needed to achieve such interconnectivity. We will also facilitate the free and smooth flow of production factors in bond market, provide more convenience to bond investors, work with relevant parties to improve the market efficiency, and continue to promote high-quality development of China’s bond market.