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BRICS NDB issues RMB 5 billion Coronavirus bond
April 4, 2020, 11:12 am

Issue will fund the RMB 7 billion ($990 million) Coronavirus assistance loan granted to China in March

Premier Li Keqiang played a large role in China’s continuing COVID-19 recovery [PPIO]

The BRICS New Development Bank (NDB) on April 2 successfully issued a 3-year RMB 5 billion Coronavirus Combating Bond in the China Interbank Bond Market. The NDB said the bond attracted interest worth more than RMB 15 billion from a high-quality diversified investor base both onshore in mainland China, as well as offshore.

The bond was priced at the lower end of the announced pricing range, and the transaction represents the largest-ever RMB-denominated bond as well as the first RMB-denominated Coronavirus Combating Bond issued by a multilateral development bank in China.

The aim of this bond issue is to support the Chinese Government in the financing of public health expenditure in Hubei, Guangdong and Henan provinces that are hit the hardest by COVID-19. The proceeds of the bond will be fully utilized to finance the RMB 7 billion Emergency Assistance Program Loan to the People’s Republic of China approved by the Board of Directors of the Bank on 19 March 2020.

This loan will contribute in a material fashion to improving the resilience of the public health sector in the three provinces.

“Since the outbreak of the Novel Coronavirus Disease – 19 (COVID-19) in December 2019, the lives of people and the economy have been heavily impacted,” said Leslie Maasdorp, NDB Vice President and CFO.

Industrial and Commercial Bank of China Limited acted as the lead underwriter and bookrunner. Bank of China Limited, Agricultural Bank of China Limited and China Construction Bank Limited acted as the joint lead underwriters for the bond.

The RMB 7 emergency assistance loan to China was NDB’s first emergency assistance program in response to an outbreak in one of its member countries and is also NDB’s largest loan to date, but as other members of the BRICS have also been impacted by the virus, more emergency assistance loans are expected to follow.

The China loan will finance urgent and unexpected public health expenditures and will focus on three provinces in China, including Hubei, Guangdong and Henan that are hit the hardest by COVID-19. The Program will support these three provinces in financing their most urgent needs for fighting the spread of COVID-19, and reducing the adverse impacts of the outbreak on their local economies.

The Program will contribute to reducing the loss of human lives and to improving resilience of the public health sector in the three provinces, particularly to strengthening their health emergency response system. The positive impacts will include mitigation of adverse social and economic impacts from the outbreak and recovery of social and economic activities.

Helmo Preuss in Makhanda, South Africa for The BRICS Post

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