Linklaters advised the Ministry of Finance of the People’s Republic of China (MOF) on its recent issuance of €2bn sovereign bonds, which were priced in Paris, France. Linklaters continued to act as its sole international legal advisor on this issuance – the MOF’s first euro-denominated sovereign bonds issuance after 2021.

This issuance comprised two series, including €1.25bn 3-year bonds with a coupon rate of 2.500% and €750m 7-year bonds with a coupon rate of 2.625%. Both series of the bonds have been admitted for trading and/or listed on the Hong Kong Stock Exchange and Euronext Access in Paris, and are deposited with and cleared through the Central Moneymarkets Unit (CMU) in Hong Kong SAR.

The offering saw strong demand from international investors, including sovereign and supranational entities, banks, insurance companies, and fund and asset management investors across various jurisdictions. The bonds were oversubscribed by 8.1 times, setting a record high for the MOF’s euro sovereign bond issuances. This issuance also helped improve the yield curve for China’s euro sovereign bonds, providing a crucial pricing benchmark for Chinese companies’ euro financing. In addition, CMU settlement and clearing was adopted for both series of the bonds in this issuance, promoting the development of Hong Kong’s financial infrastructure.

The Linklaters cross-jurisdictional team (across their Hong Kong SAR, mainland China and Paris offices), provided high-quality and seamless services throughout the preparation of all transaction documents, liaising with the CMU, and dual listings in Paris and Hong Kong SAR, among others. The deal team was led by Asia Managing Partner William Liu and Hong Kong SAR-based capital markets partner Min Fang, with key members including Yanting Sun, Youming Wu and Xueqing Zhou, and supported by Paris-based capital markets partner Véronique Delaittre, and managing associates Elise Alperte and Bénédicte de Moras.

As its sole international legal advisor, Linklaters has advised on all the MOF’s sovereign bond offerings targeting international investors since 2009. This high-profile issuance exemplifies once again Linklaters’ long-term commitment to supporting China’s diversification of international financing channels and assisting Asian sovereign issuers (including those from China, Singapore, India, Malaysia, and the Philippines) in the international capital market.

Linklaters’ Asia Managing Partner William Liu commented:

“We are honoured to have been the international legal advisor to the MOF for the past fifteen years and are deeply grateful for their continued trust in us. This successful €2bn sovereign bond offering once again demonstrates strong confidence of the international market in China’s sovereign credit and economic development outlook, and further enhances China’s global influence in capital markets. The Linklaters team looks forward to continuing to support China’s sovereign bond offerings as well as other strategic opportunities.”