Linklaters acted as international legal advisor to Industrial and Commercial Bank of China (ICBC) on its issuance offering of US$2.9bn US offshore Additional Tier 1 preference shares.

This landmark transaction marks the lowest-ever coupon for an Additional Tier 1 capital instrument issued by a Chinese bank, and represents the first offshore Additional Tier 1 issuance adopting the new rules set out by China Banking and Insurance Regulatory Commission in its latest Guiding Opinions on Capital Instrument Innovation for Commercial Banks (as revised in December 2019). Unlike past offshore preference shares issued by Chinese banks, the ICBC offshore preference shares only contain a single non-viability trigger event and permits partial or full or partial conversion.

The transaction was led by Linklaters’ capital markets partners William Liu and Terence Lau and corporate partner Kevin Cheung, with support from managing associate Min Fang.

In addition to the ICBC offshore preference shares, Linklaters has had a busy 2020 so far, acting as international legal advisor to the underwriters on Bank of China’s issuance of US$2.82bn Additional Tier 1 offshore preference shares, as well as international legal advisor to China Construction Bank on its US$2bn offshore Tier 2 capital bonds .

Linklaters has extensive experience advising Chinese financial institutions on the issuance of regulatory capital instruments. We are the only international law firm to have participated on all issuances by Chinese national commercial banks to date.