Linklaters continues to leverage its relationships with Chinese banks and corporates, winning four high-profile capital markets mandates as the country internationalises its economy.
With China looking to open up an offshore renminbi debt market, Linklaters won the race to handle the People’s Bank of China debut international bond sale, a move that will act as a calling card for Chinese mandates in the future.
Partners William Liu and Andrew Carmichael teamed up in Hong Kong and London to advise China’s central bank on the first overseas issue of renminbi government bonds. The one-year bonds, worth $787m, attracted orders of more than $4.7bn, making it six times oversubscribed and fuelling hopes that high demand will result in greater supply of Chinese bonds to the City. Liu said the UK ‘was chosen ahead of possible launches in Europe and the US’, and ‘sends a strong signal about the attractiveness of London as a global financial centre’.
He added that ‘the purpose of the issue is to increase the supply of high-quality bonds in the offshore Chinese yuan-renminbi market’ and to establish ‘a benchmark interest rate’ for the offshore market to facilitate that.
Carmichael and Liu were also recently picked to advise China Development Bank on its first issue of offshore renminbi bonds in more than ten years; the country’s third-largest lender Agricultural Bank of China on the $1bn sale of two currency bonds in London; and China Construction Bank on the issue of two-year offshore renminbi bonds worth $158.2m. The deals were marked in October in London Stock Exchange listing ceremonies arranged to coincide with Chinese President Xi Jinping’s state visit.
Frankfurt has emerged as London’s biggest rival as an offshore renminbi hub, with a first-of-its-kind deal between two Chinese exchanges and Germany’s Deutsche Börse to establish a new trading venture confirmed just a week after the president’s UK visit. Allen & Overy (A&O), King & Wood Mallesons and Dentons all secured roles on the deal to create the first dedicated platform for yuan-denominated trading outside China.
tom.moore@legalease.co.uk