The province of British Columbia in Canada issued RMB3 billion (US$456 million) worth of bonds in late January, after the approval it recently gained to register an RMB6 billion bond issuance programme with China’s National Association of Financial Market Institutional Investors.
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This is another sovereign “panda bond” offering, which closely followed the first of its kind, the issuance of RMB3 billion bonds by the South Korea government in December 2015. The tenor of the Canada bonds is three years, and the coupon rate is 2.95% per annum.
Reports said the Canada bonds were oversubscribed twice by Chinese domestic investors, including policy banks, commercial banks, fund managers and brokerage firms. Michael de Jong, the finance minister of British Columbia, credited the oversubscription to the lead underwriters.
“The approval [of the panda bond] shows we’re financially sound and that we’re good partners with the Chinese government,” de Jong said in an earlier media briefing. The bond gives the Canadian province access to the world’s third-largest bond market, he said.
Legal counsel: King & Wood Mallesons acted as PRC and international counsel for British Columbia. Its team was led by partners Richard Mazzochi and Minny Siu in Hong Kong, and partners Christine Chen, Peng Jin and Zhao Yan in Beijing. British Columbia’s Ministry of Justice was the Canadian counsel to the province.
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