Linklaters advises Bank of China on the world’s first public issuance of TONA-linked floating rate notes

Linklaters acted as international legal advisor to Bank of China, Tokyo branch on the issuance of ¥10bn (approximately US$82m) 2-year Tokyo Overnight Average Rate (TONA) benchmark floating rate notes under the bank’s US$40bn medium-term note programme. This is the world’s first public issuance of TONA-linked floating rate notes.

TONA is administered and published by the Bank of Japan and is the replacement risk free rate for Japanese yen LIBOR starting the beginning of this year. The interest rate of the notes will be based on daily compounded TONA for the prescribed observation period and interest will be payable quarterly. The notes are admitted to trading on the Tokyo Pro-Bond Market of the Tokyo Stock Exchange and are listed on the Hong Kong Stock Exchange.

The regional Linklaters team was led by capital markets partner Michael Ng, who is based in the firm’s Hong Kong SAR office, supported by counsel Grace Wee, and Tokyo-based capital markets partner Peter Frost, supported by counsel Kosuke Miyashita.

Linklaters has an established reputation in supporting clients through their journey in the LIBOR transition space in Asia. The firm has advised on many landmark transactions relating to the reform of benchmark rates, including Asia’s first SOFR Index floating rate bonds and the world's first public offering of non-sovereign senior SONIA Index bonds.