Han Kun Law Offices LLP ("Han Kun Hong Kong") and Han Kun Law Offices, acting as the Issuer's international legal advisor and PRC legal advisor to Industrial Bank Co., Ltd. Shanghai Pilot Free Trade Zone Branch ("Industrial Bank FTZ Branch") respectively, have successfully assisted Industrial Bank FTZ Branch in completing the issuance of RMB3 billion offshore Yulan Bonds under Industrial Bank Co., Ltd.'s US$5 billion offshore Medium Term Note Programme. Han Kun has provided efficient and professional integrated cross-border legal services covering PRC law, English law and Hong Kong law for this transaction, which has been highly recognized by the client.
The Bonds are denominated in offshore RMB, with an issuance size of RMB 3 billion, a tenor of 3 years and a coupon rate of 1.95%. The Bonds have been assigned a "Baa2" rating by Moody's. Industrial Bank is a listed company on the Shanghai Stock Exchange. In The Banker's 2025 "Top 1000 World Banks" ranking, it ranked 2nd among Chinese commercial banks in terms of overall performance. Industrial Bank FTZ Branch was approved for establishment in 2014 and officially opened on January 8, 2015, serving as an "innovation pilot zone" and a "future growth engine" for Industrial Bank's long-term strategic layout.
This transaction marks the largest order book and highest subscription multiple in the history of Yulan Bond issuances. It has effectively expanded the offshore financing channels of financial institutions in the Free Trade Zone and boosted the internationalisation of the Renminbi. As the first offshore bonds issued by a bank's Free Trade Zone entity and the first Yulan Bonds issued by a Free Trade Zone entity in the market, this project represents a brand-new breakthrough in the cross-border financing sector for Free Trade Zone entities.
Yulan Bonds are an innovative financial product jointly launched by Shanghai Clearing House and Euroclear Bank in 2020. Through the innovative practice of cross-border financial infrastructure connectivity, an efficient collaboration model of "Domestic Registration + International Custody" has been established. Shanghai Clearing House undertakes the core link of domestic bond registration and provides paperless registration services, while Euroclear Bank is responsible for the custody and settlement services for international investors, offering strong support for Chinese enterprises to conduct financing in the international capital market.
This historic Yulan Bond issuance not only sets a precedent for similar transactions, but also serves as a vivid practice where the Issuer, Shanghai Clearing House, Euroclear Bank, intermediaries and domestic and foreign investors jointly support the construction of Shanghai as an international financial centre, advance the internationalisation of the Renminbi and deepen the financial opening-up of mainland China.
ZHANG Yilun, a partner of Han Kun Hong Kong, has long been actively engaged in financial product innovation and supported various innovative initiatives in the national financial infrastructure sector. For instance, Partner ZHANG Yilun previously participated deeply in the entire process of the structural design and the formulation of legal document standards for the world's first Yulan Bonds and the world's first bond cleared and settled via the Macao Central Securities Depository and Clearing Limited ("MCSD"). This project once again demonstrates the Han Kun team's capability to provide clients with integrated and high-quality legal services in the field of cross-border financial innovation. The Han Kun team for this project was led by Partners SUN Wei and ZHU Jun, while the Han Kun Hong Kong team was led by Partner ZHANG Yilun.
