Linklaters advises the PRC government on its first-ever €4bn sovereign bond issuance in Luxembourg

Linklaters acted as the sole international legal advisor of the Ministry of Finance of the People’s Republic of China (MOF) on its €4bn sovereign bonds issuance, which was priced in Luxembourg. This transaction marks the PRC government’s debut issuance of euro-denominated sovereign bonds in Luxembourg.

The issuance comprised two series, including €2bn four-year bonds with a yield of 2.401% and €2bn seven-year bonds with a yield of 2.702%. Both series have been admitted for trading and/or listing on the Hong Kong Stock Exchange and the Luxembourg Stock Exchange, and are cleared through the Central Moneymarkets Unit (CMU) in Hong Kong SAR.

The offering attracted strong demand from international investors, including sovereign entities, asset managers, banks, insurers, and dealers, across various jurisdictions. Total orders exceeded €100bn, amounting to 25 times the issuance amount. Notably, the seven-year series was oversubscribed by 26.5 times, highlighting robust investor confidence in China’s sovereign credit and economic outlook, further enhancing China’s presence in global capital markets.

The transaction sets a new milestone in China’s euro sovereign bond issuances under MOF’s initiatives to promote high-level financial openness and deepen international financial cooperation.
This issuance further improved the yield curve of China’s euro-denominated sovereign bonds and addressed the market’s demand for asset diversification.

Linklaters’ multidisciplinary, cross-jurisdictional team was led by capital markets partners William Liu and Min Fang, and supported by a Luxembourg-based team including partner Nicki Kayser, consultant Delphine Horn and Laurent Benoit.

Linklaters’ market-leading expertise in Asian sovereign financing continues to set benchmarks, having recently advised on the first-ever yuan-denominated bond issued by a Central Asian issuer and debut CNY 6bn dim sum bond issuance by Republic of Indonesia.