Linklaters advised the Ministry of Finance of the People’s Republic of China (MOF) on its RMB 3bn sovereign bond offering in Macau, which was priced on 7 September 2022. This is the second issuance of RMB sovereign bonds in Macau following the first issuance in 2019, which Linklaters also advised the MOF on.
The issuance, comprising two tranches, a 2.2% RMB 2bn 2-year bond and a 2.28% RMB 1bn 3-year bond, was oversubscribed by 1.94 and 2.22 times respectively, by professional investors including relevant monetary authorities, commercial banks, insurance companies, pension investment management institutions and fund companies.
The bonds will be listed on Chongwa (Macau) Financial Assets Exchange and cleared through Macao Central Securities Depository and Clearing Limited (MCSD). This is the first sovereign bond to be cleared through MCSD since its launch – demonstrating the PRC government’s support for the development of the financial infrastructure in Macau.
This landmark transaction will further support the modern financial industry development of Macau and is an important measure by the PRC government to promote the sustainable development of economic diversification in Macau. It is also a milestone in accelerating the development of the bond market in Macau and strengthening the financial co-operation between mainland China and Macau SAR.
The Linklaters team was led by Asia Managing Partner William Liu, with support from managing associate Allen Zhang. As the international legal advisor to the MOF, Linklaters provided a seamless service from the preparation of transaction documents, to liaising with the MCSD, the settlement bank and the fiscal agent for the successful issuance of the RMB sovereign bonds.
Linklaters’ Asia Managing Partner William Liu, commented:
“We are honoured to have been the international legal advisor to the MOF for the last thirteen years and would like to extend our sincere gratitude for their continued trust in us. This successful RMB 3bn government bond issuance once again shows the strong confidence of the market in the economic development of China and further promotes its opening to the international market. Our team looks forward to continuing to support the MOF on its ongoing offshore bond issuances as well as other strategic opportunities.”
Linklaters has been the international legal advisor to the MOF since 2009, providing legal services on all its sovereign offerings targeting international investors. During June to August this year, Linklaters also acted for the MOF on its RMB 7.5bn and RMB 5bn government bond issuances in Hong Kong SAR through public bidding. The firm also previously advised the MOF on its inaugural issuance of RMB 2bn government bonds in Macau in 2019 and the Guangdong Provincial Government of China on its first offshore bond issuance in Macau in 2021.
