Panda Bonds” issuance plan to finance the development of Italian enterprises in China
Structuring of co-financing programme for Italian enterprises investing in China
23 March 2019, Rome
Cassa depositi e prestiti (CDP) and Bank of China Limited (BOC) have signed a strategic partnership agreement to support the growth of Italian enterprises in the Chinese market.
The agreement - which follows on from the memorandum of understanding signed by the parties on 28 August - was signed by CDP’s CEO, Fabrizio Palermo, and the Chairman of the Bank of China, Chen Siqing, and is aimed at supporting cooperation between the two institutions to secure financial resources dedicated to the growth of Italian enterprises in China. The agreement involves the implementation of an issuance plan for debt securities known as “Panda Bonds” and the structuring of a co-financing programme for Italian enterprises investing in China.
“Panda Bonds” issuance plan for 5 billion Renminbi
The issuance plan, for which the People’s Bank of China has begun the authorization process, concerns the issue by CDP of “Panda Bonds” reserved for institutional investors operating in China. The proceeds from the issues will be used to finance - directly and indirectly - branches or subsidiaries of Italian enterprises based in China in order to support their growth. The funds raised will be channelled to the enterprises both through Italian banks present in China and through Chinese banks. Thanks to this issuance plan, CDP will be the first Italian issuer, as well as the first European National Promotional Institution, to explore this type of market.
Agreement for the co-financing of Italian enterprises for 4 billion Renminbi
Cassa Depositi e Prestiti and Bank of China have agreed to work together on establishing a financial support programme for Italian enterprises in China. The programme will be structured over a medium/long-term period and based on a risk control approach for each individual co-financing transaction by BOC and CDP.
Lastly, the agreement envisages that CDP and BOC can continue to work together to identify potential opportunities for cooperation in particular products and sectors in which Italian companies operate such as export, corporate finance and infrastructure.