05 September 2016

King & Wood Mallesons advises World Bank in landmark development for China’s bond market

King & Wood Mallesons (KWM) advised the World Bank on its first Special Drawing Rights (SDR) – denominated bond in the Chinese Inter-Bank Bond Market.

The bonds in an aggregate principal amount of 500 million SDRs were priced on 31 August 2016 and issued on 2 September 2016, achieving a landmark development for China’s bond market and for the SDR as an international reserve asset.

The transaction expands the use of SDRs and helps promote the development of China’s domestic capital market and further demonstrates the internationalization of the Renminbi. It also demonstrates the active participation of onshore and offshore investors in the Chinese Inter-Bank Bond Market.

KWM’s cross border-team was led by Partners Richard Mazzochi and Minny Siu in Hong Kong and Christine Chen in Beijing.

The transaction involved many firsts, including:

  • publication by China Foreign Exchange Trading System (CFETS) of the reference rates for new currency pairs and CFETS acting as a calculation agent;
  • facilitating central bookbuilding for the SDR Bonds in the Beijing Financial Assets Exchange and the custody and clearing of the SDR Bonds in the Shanghai Clearing House;
  • hedging the payments due under the SDR Bonds; and
  • active participation by offshore investors in subscriptions for the SDR Bonds in the Inter-Bank Bond Market.

The transaction was announced as the International Monetary Fund is scheduled to officially include the yuan as the fifth global reserve currency in its SDR basket in October which will further promote the development of SDR-denominated financial instruments.

Lead Partner Richard Mazzochi said: “We are thrilled to have supported the World Bank on this momentous bond issue. We see the issuance of these bonds as a significant step in the ever-growing use of Renminbi, the internationalisation of the Inter-Bank Bond Market and the recognition of the importance of China’s market to issuers from across the world.”

Leveraging the firm’s local depth in China and global platform, the KWM team has been at the forefront of the internationalization of China’s bond market from the very first panda bond issuance by International Finance Corporation in 2005.

In January 2016, KWM assisted the Province of British Columbia (BC), Canada on its issue of RMB 3 billion bonds in the Inter-Bank Bond Market. KWM also advised the underwriters on the RMB 3 billion bond issuance by the Republic of South Korea in December 2015.

Media Contact

Share on LinkedIn Share on Facebook Share on Twitter
    You might also be interested in

    On 18 March 2021, King & Wood Mallesons Chongqing office officially opened.

    19 March 2021

    Asia’s top tier international law firm King & Wood Mallesons (KWM) is continuing to build its brand awareness and favourability on the global stage.

    11 February 2021

    Following the effectiveness of the decision rendered by China National Intellectual Property Administration (“CNIPA”) last month on the invalidation of the disputed No. 12676248 trademark "STORY OF...

    01 December 2020

    On 30 September 2020, ACM Research (Shanghai), Inc.(ACM Shanghai) received approval from the 82nd meeting of the Listing Committee of the Science and Technology Innovation Board of the Shanghai Stock...

    14 October 2020

    You may also be interested in...

    This site uses cookies to enhance your experience and to help us improve the site. Please see our Privacy Policy for further information. If you continue without changing your settings, we will assume that you are happy to receive these cookies. You can change your cookie settings at any time.

    For more information on which cookies we use then please refer to our Cookie Policy.