China Minsheng Banking Corp is planning to sell a benchmark senior unsecured dollar green bond, according to two sources close to the situation.
The fifth largest Chinese lender by assets (among listed mainland commercial banks) is flexible on tenor and might go for a three year deal, suiting investor preference.
The Beijing-headquartered bank was last in the bond market in October 2020, raising $500m from a three year floating rate deal, Dealogic data shows. Those notes pay a coupon of 90bp over three month Libor.
“They have been looking at a very tight pricing,” said the first source, who was expecting the deal to be launched on Thursday. It is unclear why the bank delayed the transaction to next week.
CMB, which is mostly owned by private sector companies, is not the only Chinese issuer looking for a better deal window. Local government financing vehicle Tianjin Binhai New Area Construction & Investment Group Co is also planning to hit the market next week. The state-owned issuer had to cancel its outing earlier this month due to weak investor sentiment following US house speaker Nancy Pelosi’s Taiwan visit.
Like the LGFV’s deal, several bookrunners comprising a mix of local and offshore banks have been mandated on CMB's transaction. “Almost every [securities] house on the street is on the deal,” said the second source.
The green bonds will be issued out of CMB's $5bn MTN programme that was listed on the Hong Kong Stock Exchange this week. The bank’s Hong Kong branch and Standard Chartered are arrangers of the MTN, the filing shows.
Proceeds of the offering will be used for working capital and general corporate purposes. At the end of 2021, CMB became one of the systematically important banks in China.
On Thursday, three Chinese issuers, including Shandong Shipping Corp, priced their notes.
More issuers are lining up bonds, with DCM bankers hoping for deal flow to pick up next week. For instance, Foshan Nanhai Lian Da Investment Holding and Xiaoxian Construction Investment Group are seeking bids for their respective $500m and $300m transactions.