Frankfurt RMB bond to transform German capital markets

Author: Ashley Lee | Published: 9 Jul 2014

Frankfurt’s first offshore renminbi bond by a Chinese issuer has signalled its ascent as a European renminbi hub. It was also the first Goethe bond not governed by German law, opening the market to international issuers.

China Construction Bank (CCB) Frankfurt branch’s two-year RMB 1.5 billion deal ($242 million) is the first renminbi-denominated bond from a Chinese issuer to be listed on Frankfurt’s regulated market. It is also the first bond listed and cleared in Frankfurt that was not governed by German law.

Chinese state-owned banks have been selling bonds in Europe’s financial centres, sparking competition between prospective renminbi hubs. Before CCB’s May offering, Bank of China’s Luxembourg branch offered the first offshore renminbi bonds in the Eurozone. Bank of China’s Paris branch is reportedly...