2023.10.18
On October 16, 2023, Egypt issued RMB 3.5 billion sustainable panda bonds through book building in China’s interbank bond market. The issuance has a maturity of three years with a coupon rate of 3.51% and is the first ever offering of panda bonds by an African country. It is also the first sustainable and guaranteed sovereign panda bond issuance.
The panda bonds issued are sustainable development bonds, and all proceeds raised from the issuance will be used to cover dedicated sustainability expenditures under Egypt’s Sovereign Sustainable Financing Framework. This includes projects such as climate-proofing agriculture, clean transportation, sustainable water and wastewater management, sanitation, government-subsidized housing, supportive infrastructure, digital infrastructure, renewable energy and biodiversity conservation. The issuance promotes Egypt’s transformation towards a green economy and further demonstrates the outstanding achievements of Sino-Egyptian cooperation in sustainable development and the debt capital market. It also contributes to the joint construction of the Belt and Road Initiative between China and Africa.
The issuance structure is innovative. The bonds are backed by unconditional and irrevocable guarantees provided by the African Development Bank and the Asian Infrastructure Investment Bank, making it the first bond issuance in the domestic bond market to be guaranteed by two multilateral development institutions.
Located in North Africa, Egypt borders the Mediterranean Sea, the Red Sea, Libya, the Gaza Strip, Israel and Sudan. It is the most populous country in the Middle East and the third most populous country in Africa. Egypt was the first Arab and African country to establish diplomatic relations with China, while China’s Belt and Road Initiative and Egypt’s Vision 2030 project continue to promote and support each other. In recent years, cooperation between China and Egypt has flourished in many areas.
JunHe acted as the PRC legal counsel to Bank of China Limited (as the lead underwriter and bookrunner) and HSBC Bank (China) Company Limited (as the joint lead underwriter and bookrunner). JunHe provided legal services including reviewing the offering documents and the underwriting agreement, conducting due diligence on the issuer and the guarantors, reviewing the legal opinions issued by the issuer’s and the guarantors’ lawyers, and issuing legal opinions on the closing to the underwriters. With its delivery of detail-oriented and professional expertise and high-quality and efficient legal services, JunHe’s team was recognized and trusted by the clients.
The JunHe team was led by partners YU, Yongqiang (YY) and LEI, Tianxiao, with support from partner HUANG, Wei for the internal review.
