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Updated: NDB readies Panda bond to fund emergency loan to China

Panda eating bamboo shoots from Adobe 230x150
By Rebecca Feng
30 Mar 2020

New Development Bank, the Shanghai-based multilateral development bank, is planning to sell a Rmb5bn ($704m) Panda bond that will be used to provide an emergency loan to China.

The lead underwriters – Agricultural Bank of China, Bank of China, China Construction Bank and Industrial and Commercial Bank of China – have set the initial price guidance for the three year transaction at between 10bp below and 50bp above the same tenor China Development Bank (CDB) bonds, according to a banker on the deal. 

The deal will go through a two-day bookbuilding process starting from Wednesday and will be priced on Thursday, the banker added.

The banks, led by lead underwriter and bookrunner ICBC, set the official price guidance at 2.37%-2.97% on Tuesday, according to a filing with the Shanghai Clearing House.

NDB first tapped the Panda bond market in 2016 with a five year Rmb3bn green deal. It returned to the onshore renminbi market in February last year to bag a dual-tranche Rmb3bn green bond. The Rmb2bn three year and Rmb1bn five year tranche of that transaction were sold at 3% and 3.32% respectively and were trading at 2.09% and 2.54% on Monday, Wind data shows.

The issuer’s upcoming deal is rated AA+ by both S&P Global Ratings and Fitch, according to the banker. The note does not have any domestic ratings.

NDB will be using all the proceeds from the bond to fund the Rmb7bn Emergency Assistance Program Loan to China. The programme was announced on March 20. The loan will be NDB’s largest loan to date and focus on three provinces that are hit the hardest by Covid-19 – Hubei, Guangdong and Henan.

ABC, BOC and CCB were the joint lead underwriters. In addition, Bank of Beijing, Bank of Communications, Bank of Ningbo, China International Capital Corp, China Merchants Bank, Citi, Citic Bank, Citic Securities, DBS, Deutsche Bank, Donghai Securities, Everbright Bank, Everbright Securities, First Capital Securities, HSBC, Industrial Bank, JP Morgan, Mizuho, Shanghai Pudong Development Bank, Shengwan Hongyuan Securities and Standard Chartered are in the syndicate team.

The NDB was established by Brazil, China, India, Russia and South Africa to support infrastructure and sustainable development projects in the Brics countries and other emerging economies. 

Updated on April 1 to include the official initial price guidance and more details on the syndicate group. 

By Rebecca Feng
30 Mar 2020