China has pulled more than CNY37 billion ($6.84 billion) of investor bids for its first-ever sale of a green sovereign bond, as it looks to raise as much as CNY6 billion.
The Chinese Ministry of Finance set the initial price guidances of the three-year and five-year offshore CNY-denominated notes at yields of around 2.3% and 2.35%, according to a person familiar with the matter. The notes could be priced as early as today.
The plan is to list the debut green offering in London, highlighting China’s recent efforts to build closer bilateral financial ties with the UK. China’s government earlier held an investor conference in the city and has ambitions of tapping a European market that’s the world’s largest buyer of sustainable debt.
“Even the opportunity to have a meeting, that’s unprecedented,” said Xuan Sheng Ou Yong, sustainable fixed-income lead for Asia-Pacific at BNP Paribas Asset Management in Singapore. It’s rare for investors to have opportunities to engage with the nation’s finance ministry “to talk about its plans, the state of economy, its decarbonization strategy,” he said.
The debt issuance plan was first made public in January, when the UK Chancellor of the Exchequer visited Beijing and both countries pledged to enhance financial cooperation and boost capital market partnerships. It also comes as China ramps up offerings in overseas markets, including a US$2 billion ($2.69 billion) bond sale in Saudi Arabia in November and a EUR2 billion ($2.9 billion) deal in Paris in September.
While global issuance of green bonds slowed in the final three quarters of 2024, Chinese entities are the largest issuers of the notes so far this year, data compiled by Bloomberg Intelligence show.
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China, the world’s top polluting nation, is on track to peak its greenhouse gas emissions, and potentially ahead of a 2030 deadline. The nation is pursuing a range of initiatives to accelerate decarbonisation, including work to expand its emissions trading market and to extend its rapid uptake of renewable energy, Premier Li Qiang said in an annual work report last month.
