Luso International Banking sells RMB1.5 bln in ‘panda bonds’

Local bank Luso International Banking has become the first Macau-based issuer to sell renminbi-denominated bonds in China’s interbank market, Global Capital reported.

The three-year medium-term notes were priced at 3.28 per cent on Friday, with Luso Bank raising the planned RMB1.5 billion via ‘panda bonds’, with the final yield landed around the middle of the price guidance of 3-3.6 per cent.

A ‘panda bond’ is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in the People’s Republic of China.

The bank described the bonds issue as a benchmark for a new source of funding for financial institutions based in the Special Administrative Region.

Before launching the three-year deal, Luso Bank received an RMB3 billion quota valid until July 2023 from the People’s Bank of China to issue bonds in China’s interbank market.

Foreign investors were said to account for nearly a third of the orders, with notes were sold in China’s interbank market, as well as through Bond Connect.

Bank of China and Citic Securities were the lead underwriters and lead bookrunner and joint bookrunner, respectively.

Xiamen International Investment Limited (Hong Kong) holds 49 per cent of Luso Bank, a wholly-owned subsidiary of Mainland-based Xiamen International Bank.