中国银行海外人民币“申根债”
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Offshore-RMB “Schengen” bond refer to the bonds, dominated in Chnese RMB, issued outside China and listed in Mainland Europe. In a narrow sense, sometimes it refers to the offshore RMB bonds listed in Luxembourg Stock Exchange.
1. Origin
On 8th May 2014, Bank of China Limited, Luxembourg Branch launched its first offshore-RMB “Schengen” bond, for an amount of RMB 1.5 billion. The transaction is done under the USD 10 billion MTN programme of the Bank of China Group. With the support from international and local institutional investors, the issuance was around 2 times oversubscribed. It was priced at 3.50% for the 3-year bond.
This first offshore-RMB bond was originately named ‘Schengen’ bond due to the fact that ‘Schengen’ has a special meaning in European countries. The name of a small village at the border of Luxembourg, France and Germany now stands for free travel between Schengen member countries without further application for different visas. The pronunciation of ‘Schengen’ in Chinese represents the meaning of “root here and develop here”.
2. Significance
Comparing to Dim Sum bonds, which are the offshore RMB bonds listed in Hong Kong. They are named after dim sum, a popular style of cuisine in Hong Kong. The Schengen bonds are the offshore RMB bonds listed in Mainland Europe, featuring a new trend of the internationalization of RMB, and establishing a brand name for the RMB bonds in Eurozone.