OREANDA-NEWS. ICBC issued the first bonds denominated in SDR for the International Bank for Reconstruction and Development (IBRD) (World Bank) as lead book runner and lead joint manager in 2016 in China's inter-bank bond market. This issuance is worth 500 million SDR units (equivalent to around RMB 4.66 billion), with a term of three years and coupon rate of 0.49%. This is the first SDR-denominated bond issued since 1981 and also the first SDR-denominated bond issued in the form of public offering worldwide.

The deal was well received by domestic and overseas investors with 2.47-time over-subscription, as SDR-denominated bond better avoid interest and exchange rate risks than the single-currency instrument. Participating institutions include domestic banks, insurance companies, securities companies, overseas currency authorities, international development agencies as well as other diversified local and foreign-currency investment agencies.

Experts pointed out that SDR-denominated bond can further expand the usage of SDR-denominated assets, increase the attractiveness of SDR as the ultra-sovereign reserve currency and improve international currency system. Meanwhile, SDR-denomination and RMB-settlement will boost RMB internationalization and improve global impact of Chinese bond market.

As the largest commercial bank in China and the world, ICBC holds a leading position in RMB bond underwriting at home and abroad. Since 2007, the Bank has been consistently ranked No. 1 in terms of bond underwriting amount in China. Its extensive underwriting experience secured strong capabilities to issue innovative products. During the issuance, ICBC efficiently provided a series of services for the World Bank including account opening with domestic custodian institution, product design, pricing, roadshow in Beijing and Shanghai and hedging. Going forward, ICBC will continue to expand cooperation with international issuers and support the progress of RMB internationalization.