12 November, 2013

Allen & Overy has advised the Joint Global Coordinators and Bookrunners on China CITIC Bank International’s USD300 million Basel III compliant Tier 2 Subordinated Notes. This is only the second Tier 2 subordinated note issuance in Hong Kong under the new banking capital rules which came into effect on 1 January 2013.

The USD300 million in principal amount of 6% Tier 2 Subordinated Notes were issued by China CITIC Bank International on 7 November 2013 and listed on The Stock Exchange of Hong Kong.

Commenting on the deal, partner John Lee said: “This is a significant deal given it is only the second ever to market of its kind and the first to have a partial write-off structure, which was possible as these Notes qualify as Tier 2 capital for China CITIC Bank International only and not for its parent bank.  While the HKMA permits a partial write-off, CBRC does not.  The fact that the deal was very well received by the investors, in particular, institutional investors, is also significant as it further strengthens the growth momentum of bank regulatory capital products in Asia.”

BBVA, HSBC and The Royal Bank of Scotland were the Joint Global Coordinators and Bookrunners. Other joint Bookrunners included CITIC Securities International and Goldman Sachs. ANZ and BNP Paribas were Co-managers.

The Allen & Overy team was led by partner John Lee (Hong Kong), supported by associates Katie Hickmet and Woo Suk Hong.

Other law firms involved: Linklaters represented China CITIC Bank International.

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