2023.12.13
China Merchants Bank Co., Ltd. (“CMB”) recently announced that it had issued RMB30 billion 2023 undated capital bonds (the “Bonds”) on the national interbank bond market through book building. The proceeds will be used to supplement other Tier 1 capital, which will improve CMB’s capital structure and its ability to serve the real economy.
CMB was founded in 1987 in the Shekou Industrial Zone of Shenzhen and was at the forefront of China’s reform and opening-up. CMB was China’s first joint-stock commercial bank wholly owned by corporate legal entities and the first pilot bank to promote China’s banking industry reform, driven by endeavors from outside the government. After 36 years of growth, it is listed in both Shanghai and Hong Kong, with financial licenses covering commercial banking, financial leasing, fund management, life insurance, overseas investment banking, consumer finance and wealth management subsidiaries. In 2023, CMB ranked 179th on the Fortune Global 500 List, and 11th on the list of the “Top 1,000 World Banks” released by The Banker (UK). CMB was named the “Best Bank in China” by Euromoney for five consecutive years, marking the first ever “Five Consecutive Championships” of this award.
This was the second issuance of perpetual bonds by CMB, and attracted extensive attention from the market. The Bonds were well received by nearly 200 institutions including banks’ wealth management subsidiaries, insurance companies, city and rural commercial banks, funds, securities companies, trust companies and overseas investors, with the total bid amount exceeding RMB75 billion. Given the high market recognition of the Bonds, the issuer fully exercised its over-issuance right to increase the issuance to RMB30 billion, which met investors’ demand to the maximum extent. The Bonds were issued at an interest rate of 3.41%, setting a new record low in perpetual bonds issued by joint-stock banks in recent years. The spread between the Bonds and 5-year CDB bonds was 74 BPs, which was also the lowest for perpetual bonds issued by banks in 2023.
As a long-term legal service provider for CMB, JunHe has assisted it in issuing various bonds. Acting as the counsel to CMB in this bond issue, JunHe provided the client with whole-process legal services, including conducting legal due diligence, issuing PRC legal opinions, drafting and revising relevant filings, and communicating and cooperating with the other intermediaries. JunHe’s team won unanimous recognition from the client and the other intermediaries for its solid expertise and professional services.
The JunHe team was led by partner LIU, Yongzhao, with great support from partner LEI, Tianxiao for the internal review.
