Belt and Road bonds pick up steam with corporate issuance

GLP China is the first firm to issue B&R bonds following a late December issuance by the China Development Bank.

China’s largest logistics operator – GLP China – has secured approval from the China Securities Regulatory Commission to issue up of 12 billion yuan ($1.83 billion; €1.54 billion) of  ‘Belt and Road bonds’ on the Shenzhen Stock Exchange.

The onshore issuance is the first-of-its kind by a corporate. The B&R bonds are expected to finance projects under the Belt and Road initiative proposed by China’s President Xi Jinping back in 2013.

The programme aims to build infrastructure and connect Asia and Europe via land and sea for trade and economic growth, trying to plug the massive need for infrastructure in these regions. The Asian Development Bank’s latest estimate shows that developing Asia will require $1.7 trillion of annual infrastructure investments through 2030.

The GLP China issuance will help the company repay existing debt related to the financing of its recent acquisitions of logistics assets in Europe.

On 20 December 2017, China Development Bank issued the first-ever B&R bonds denominated in US dollars, raising $350 million through a private placement in Hong Kong to fund the development of B&R projects. The development institution is one of the key forces driving the B&R initiative with a financing budget of 250 billion yuan. At the end of Q3 2017, CDB had provided loans of around 178.9 billion yuan to projects and schemes under the B&R initiative.