Recently, China Merchants Bank Co., Ltd. (“CMB,” with stock code A/H, 600036/03968) successfully issued its 2022 Phase 1 green financial bonds on the national interbank bond market of China. This is the first issue of green financial bonds by CMB and the first issue of green financial bonds by a commercial bank in China for the purpose of rural revitalization. The offering size was RMB 5 billion and the maturity of the bonds is three years. All the funds raised from the issue will be used in green industry projects in specific counties to support rural revitalization financial services, particularly in wind power, photovoltaic and other clean energy projects.
CMB is the first joint-stock commercial bank in China that is wholly owned by a legal entity and the first pilot non-state-owned bank reformed in response to the Chinese government’s initiatives. It has developed into a bank group listed in both Shanghai and Hong Kong and has commercial banking, financial leasing, fund management, life insurance, foreign investment banking and other financial licenses. In 2021, CMB had been named “the Best Bank in China” by EuroMoney for three consecutive years, becoming the first “three consecutive” winner in the history of this award. It was also ranked 14th on the Banker Top 1000 World Bank list and 162nd on the Fortune China 500 list.
The implementation of rural revitalization strategies raises concerns regarding the significance of financial support for rural green development. In March this year, the People’s Bank of China issued the Opinions on the Key Works of the Provision of Financial Support for the Comprehensive Implementation of Rural Revitalization in 2022, which further directs the financial system to optimize the allocation of resources and expand financing channels for green development in the agriculture industry and rural areas, and encourages the issuance of green financial bonds to support green development in these areas. In particular, the Opinions directs financial institutions to increase credit support for the construction of wind power generation, solar power, photovoltaic and other infrastructure in eligible rural areas, and outlines a direction for the financial sector to strengthen its support for green development in rural areas. The successful issuance of the first green financial bonds for the purpose of rural revitalization in China is a new action undertaken by CMB to further support rural revitalization and the development of the green economy, which reflects that CMB’s mission is in accordance with the national strategy.
In the project, JunHe acted as the legal counsel of CMB for special issues and assisted CMB with a series of works, including the performance of legal due diligence, the drafting of the relevant documents and the preparation of the filing documents. JunHe maintained close communication with the CMB and other intermediaries and provided legal services for the issuance professionally and efficiently, which was highly praised by the participants of the project.
The project was led by partner LIU, Yongzhao, and partner Joe Wan was responsible for the internal review.