Linklaters has advised the Frankfurt branch of China Construction Bank Corporation (CCB) on the successful issuance of its first offshore renminbi bonds. The Chinese currency bonds are listed on the Regulated Market of the Frankfurt Stock Exchange. The clearing is carried out by Clearstream Banking Frankfurt. The transaction was oversubscribed several times.

The ongoing internationalisation process of offshore renminbi bonds in continental Europe raises many interesting questions. We provide the answers and take the opportunity to advise on pioneering transactions like this one”, says Dr Christian Storck, partner at Linklaters’ Frankfurt office.

The placement of the renminbi bonds with a volume of 1.5 billion Chinese renminbi yuan (CNY) and a term of two years is a landmark for CCB and for the development of the Frankfurt financial centre as an offshore renminbi hub: the admission of renminbi bonds of a foreign issuer on the Regulated Market of the Frankfurt Stock Exchange and the admission of bonds that are subject to English law by Clearstream Banking Frankfurt are totally innovative. CCB is the first Chinese bank to issue offshore renminbi bonds through a German branch as so-called “Goethe bonds” which are listed and cleared in Frankfurt and have obtained an approval of their stock exchange admission prospectus by the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin).

This transaction is a real breakthrough: in the future, other foreign issuers will also be able to list and clear offshore renminbi bonds in Frankfurt. This paves the way for a further growth of the offshore renminbi market in Germany.

In the transaction, CCB, Commerzbank, BNP Paribas and Standard Chartered (Hong Kong) Limited acted as joint global coordinators, joint bookrunners and joint lead managers.

CCB is a leading commercial bank in China offering a wide range of banking products and financial services. The financial group based in Beijing is active in 16 countries; it has 12 overseas headquarters and six wholly owned subsidiaries. With the Frankfurt branch, CCB intends to strengthen the financial group’s position in Europe and to facilitate and further establish the general trading activities between Germany and China.

A Linklaters team led by Dr Christian Storck (Capital Markets, Frankfurt) advised on the transaction. The team also included Dr Kurt Dittrich, Dr Gabriele Röhl (both Capital Markets, Frankfurt), Terence Lau (Capital Markets, Hong Kong), William Cresswell, Dr Claus Mößle (both Capital Markets, Frankfurt), Min Fang (Capital Markets, Hong Kong), Daria Latysheva, Dr Monir Taik and Olga Bergmann (all Capital Markets, Frankfurt).