Linklaters advises on RmB 3bn Chinese debut bond sale in London

Linklaters has advised the Ministry of Finance (MoF) of the People’s Republic of China in its RmB 3 billion debut London bond sale. This is the first time the sovereign has listed a bond on the London Stock Exchange.

The deal follows a number of moves from the Chinese regulators over the last few years to internationalise the RmB or yuan and to make it a major international currency.

Andrew Carmichael, Capital Markets partner at Linklaters says: “A number of steps have been taken to try and boost the use of the yuan, including the International Monetary Fund last year announcing that they will add the yuan to its basket of reserve currencies. In addition to the string of bond deals listed on London Stock Exchange last year, this deal will help to confirm London’s place as the global centre of yuan trading outside of Asia.”

He also says: “This issue is documented in English, governed by English law and listed on the London Stock Exchange, all of which are significant commitments by the PRC to full participation in the international financial system. The deal also shows the Chinese government’s commitment to developing the role of London in the international use of the RmB.”

The Linklaters team was led by Capital Markets partner Andrew Carmichael and included senior partner Robert Elliott and partner Richard O’Callaghan and associates Jessica Andrew and Amrita Ahluwalia.

Last year Linklaters has advised the People's Bank of China on its 5bn of 3.10% bonds due 2016 in London. That was the first time that renminbi government bonds have been issued outside China, in an attempt to expand the international renminbi debt market. Linklaters has also advised on MoF offshore RmB financings in Hong Kong since 2009.