The Asian Infrastructure Investment Bank (AIIB) Thursday launched 3 billion yuan (about 423 million U.S. dollars) of panda bonds in the China Interbank Bond Market. This is the first time when this multilateral organization decided to enter the market.
The issuance has a maturity of three
years with a coupon rate of 2.4 percent, which aims to raise capital to
facilitate the AIIB's response to COVID-19 in the short term and maintain its
commitment to investing in sustainable infrastructure in the long term, according
to a statement from the AIIB. The bonds were 2.78 times oversubscribed by more
than 20 investors with 35 percent allocated to domestic investors and 65
percent to international investors, said the AIIB.
"The successful transaction serves
as an important benchmark for our future issuances in the years ahead,"
said Jin Liqun, AIIB president and chair of the board. The successful pricing
is another key milestone in the AIIB's funding strategy to be a diversified
issuer with access to investors globally, noted AIIB Chief Financial Officer
Andrew Cross. The net proceeds from the bond sales will be used to fund the
AIIB's financing, including those under its COVID-19 Crisis Recovery Facility
(CRF), which was created as part of a coordinated international response to
counter the COVID-19 pandemic and to respond flexibly and efficiently to client
demands. The CRF has an initial size of between 5 billion and 10 billion U.S.