China Development Bank Expands Funding with Dual‑Currency Bond Listing

Arabian Post

a day ago

China Development Bank has successfully listed two bonds on Nasdaq Dubai, raising a total of more than US $1 billion in a strategic bid to broaden its foreign‑currency funding channels and attract global investors. The issuance includes a US $500 million three‑year floating‑rate tranche tied to SOFR + 30 bps, and a €500 million three‑year fixed‑rate tranche offering a 2.25 percent coupon. Both tranches carry an A1 rating from Moody's.
Investor appetite proved robust across both offerings. The euro tranche was subscribed 15 times over, marking the highest subscription ratio so far for a Chinese bank's single public bond issue, while demand for the US dollar tranche was three times oversubscribed, achieving the tightest spread to SOFR among comparable issuances. Interest originated primarily from institutions in Europe, the Middle East and Asia, including banks, sovereign entities, investment funds and asset managers; more than 30 percent of the euro tranche was allocated to high‑quality supranational, sovereign, and agency investors.
Nasdaq Dubai welcomed the listing under the official securities list of the Dubai Financial Services Authority, with Hamed Ali, CEO of both Nasdaq Dubai and Dubai Financial Market, describing the move as a deepening of financial ties with Chinese lenders. 'This milestone underscores Dubai's position as a trusted global hub for cross‑border capital flows,' he commented.
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This dual‑currency offering forms part of CDB's long‑term strategy to diversify its funding base. Since resuming international bond issuances in 2015, the lender has raised the equivalent of US $42.5 billion in multiple currencies—USD, EUR, GBP and HKD—through public and private offerings.
Nasdaq Dubai, which already hosts over US $13.4 billion in listed Chinese fixed‑income securities and more than US $136.2 billion in total debt issuances, has positioned itself as a preferred centre for Chinese and international issuers seeking cross‑border access.
The structure of the issuance—offering both floating‑rate and fixed‑rate components in parallel—addresses differing investor needs. The floating‑rate instrument appeals to US dollar investors aiming to hedge against interest rate uncertainty by aligning returns with short‑term rates, while the fixed‑rate euro tranche delivers stable yield expectations at a time when eurozone rates remain relatively low. The A1 credit rating lends further reassurance of CDB's high repayment capacity.
Market analysts suggest that the record subscription levels reflect strong global confidence in sovereign or quasi‑sovereign credit combined with growing investor demand for diversified, high‑quality issuances from non‑Western borrowers. One commentator told Bloomberg that the euro tranche 'demonstrated unprecedented demand for Chinese credit offshore,' a sentiment echoed by allocations to Europe‑based sovereign wealth and supranational issuers.
Nasdaq Dubai's hosting of the bond listing lifts its international profile. The exchange has actively courted Chinese sovereign and financial institution issuers—including ICBC, Bank of China, China Construction Bank, China's ministry of finance, and Hong Kong Government entities—by facilitating access to capital from Europe, the Gulf and Asia. With total listings now exceeding US $13.4 billion, the venue's debt market is fast approaching the scale of some European sub‑exchanges.
Financial practitioners suggest the listing may act as a template for future issuances from Chinese state‑owned financial institutions, offering investor diversification benefits and potential cost savings through a more competitive pricing environment. European investors, in particular, appear drawn to the euro tranche's high demand, which points to appetite for enhanced yield coupled with capital security.
Experts in Gulf and Asia‑Pacific fund flows are now closely watching whether more Chinese issuers will harness Nasdaq Dubai's platform for offshore funding, thereby recalibrating traditional bond‑raising channels via London or New York. Dubai's regulatory framework, overseen by the DFSA, alongside its strategic position between Europe and Asia, provides a compelling value proposition.
The success of CDB's dual tranches also underscores the evolving depth of global bond markets. The presence of SOFR‑linked floating‑rate bonds shows growing acceptance of this benchmark outside North America. Meanwhile, the euro tranche sets a new benchmark for Chinese issuers in terms of subscription records and tranche structuring.
For China Development Bank, this launch enhances its capabilities to fund infrastructure, social development and global lending priorities. For Nasdaq Dubai, it represents another step forward in building a globally integrated bond market serving issuers and investors across major time zones.