Capitalising on favourable Euro rates: Crédit Agricole CIB supports Asian sovereigns in tapping EUR bond market

As the market anticipated US dollar rate cuts, issuers explored opportunities in other currencies for more favourable funding conditions. Although inflation and geopolitical uncertainties in Europe remain, as the Fed has cut rates in mid-September and the market anticipates further cuts in the coming months, the Euro bond markets presents attractive funding opportunities for issuers.

Crédit Agricole CIB, a leading debt capital market bank in Asia-Pacific, supported the governments of China, Hong Kong SAR and Indonesia in issuing Euro bonds, a flexible gateway for non-European corporates or governments to secure capital in another currency.

The Ministry of Finance of the People's Republic of China (MOF) returned to the international debt capital market in 2024 for the first time since 2021. Recently priced on 26 September, the €2 billion dual-tranche issuance included a €1.25 billion 3-year tranche and a €750 million 7-year tranche. At the time of issuance, it is the largest EUR issuance out of Asia in 2024 and from China since 2022.

China MOF chose to launch the deal in person over an investor conference purposely arranged in Paris, as the country continues to deepen the connection with France and the broader European financial markets. The location signifies the Ministry’s confidence in the European market. As a Paris-headquartered bank, a joint lead manager and a joint bookrunner on the transaction, Crédit Agricole CIB played a meaningful role in facilitating investor engagement throughout the process.

On 3 September, the Republic of Indonesia (ROI) priced Will open in a new tab a multi-tranche issuance, comprising a two US dollar tranches totalling US$1.8 billion and a €750 million Sustainable Development Goals (SDG) bond offering.

The Euro tranche marks the second Sustainable Development Goals (SDG) bond issued an Asian sovereign, following the Republic of Indonesia’s first issuance in 2021 which was the very first by a sovereign in Asia.

A successful collaboration among our global markets, market coverage, sustainable banking and back office teams, this transaction represents the largest G2 currency bond issuance by Asia ex-Japan sovereign issuers in 2024 at the time of issuance, and reset the Republic’s Euro pricing curve since its last Euro-denominated issuance in September 2021. With 3.5 times of oversubscription, the Euro portion exceeded the Ministry of Finance’s price and size targets.

Crédit Agricole CIB is a joint lead manager and a joint bookrunner for the issuance.

The Hong Kong SAR Government completed an approximately HK$25 billion multi-tranche multi-currency green bond offering Will open in a new tab under the Government Sustainable Bond Programme on 17 July. This is the eighth institutional green bond issuance by the HKSAR Government, including two digital green bond offerings in 2023 and 2024.

Crédit Agricole CIB acted as one of the joint global coordinators, joint bookrunners, joint lead managers and joint green structuring banks on all tranches denominated in Renminbi, US dollars, and Euro. Crédit Agricole CIB is honoured to be one of the only two banks mandated as the joint global coordinator and joint green structuring bank in all institutional green bond issuances by the HKSAR Government since 2019.