Crédit Agricole Establishes Panda Bond Program in China and Issues Inaugural ¥1 Billion Offering

Cleary Gottlieb represented Crédit Agricole S.A. in the establishment of a Panda bond issuance program in China and the subsequent inaugural offering of ¥1 billion (around €127 million at current exchange rate) senior preferred fixed-rate bonds due 2022.

Crédit Agricole S.A. has successfully obtained regulatory approval on the program enabling an access to the onshore Chinese Interbank Bond Market. Crédit Agricole S.A. is the first European G-SIB Financial Institution to obtain such an approval from the People’s Bank of China and to issue Panda bonds on the onshore Chinese Interbank Bond Market.

The program has been set with a program cap of up to ¥5 billion (around €640 million at current exchange rate), which can be issued partially or in totality in the next two years. Crédit Agricole S.A. intends to become a repeat issuer in the fast-growing Panda market to fund its activities in China and further diversify its long term funding.

The offering closed on December 5, 2019, and was led by Bank of China as lead underwriter and Agricultural Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Credit Agricole CIB (China) Ltd. as joint-lead underwriters. The Panda bonds will mature in 2022 and bear a fixed interest rate of 3.4% per annum.

The proceeds of this first Panda bond issuance will be used to finance its wholly owned banking subsidiary, Crédit Agricole CIB (China) Ltd., which has been growing its footprint in China to serve its international client base via financing and capital market transactions. Headquartered in Shanghai, Crédit Agricole CIB Chinese franchise has become a significant growth engine in Asia-Pacific for the group.

Crédit Agricole S.A. is the lead bank of the Crédit Agricole Group, which is the largest banking group in France and one of the largest in the world.