MILAN, Jul 26 (Class Editori) – CDP, the Italian Deposit and Consignment institute, chose some of the best banks in the world to have them organize and coordinate the issuing of its first Panda Bond – the first yuan-denominated issue by a Chinese-European institution.
Last Wednesday, CDP received the authorization from the People Bank of China (PBOC) for the placement of yuan-denominated shares with institutional investors operating on the Chinese internal market.
Among the banks holding CDP’s mandate are: as Lead Underwriter, Bank of China; as Joint Lead and Underwriter, China Development Bank, Goldman Sachs, Gao Hua Securities, ICBC, and JPMorgan Chase Bank.
Meanwhile the Chinese rating agency China Chengxin International Credit Rating classed CDP as AAA with a fixed outlook. Achieving a Chinese on-shore rating is part of the institute’s preliminary activities for commencing the 2019 Renmibi Bonds issuing plan.
All financial resources derived from individual issues will fund the activities of Italian companies – those operating in China or intending to approach the market. The enterprises will be allowed to access funding through Italian banks directly, through their Chinese branches, or through Chinese banks.
CDP is planning the placement of 5 billion yuan worth of shares – around 650 million euros. Last July 10th, on the occasion of the Italy-China Financial Forum in Milan, the Minister of Economy, Giovanni Tria, explained that CDP will start from a first 150-million issue.
The recent agreement lifting the Italy-China double taxation also contributed to CDP’s operation. Based on the understanding, in Italy all interest payments connected with CDP’s issued shares – benefiting subjects residing in China - are free from deductions. It comes across as a clear reference to the upcoming issuing of Panda Bonds on the Chinese market.
This financial operation comes at the end of a long preparation stage on side of CDP’s financial management. The first person to look into this opportunity was Fabrizio Palermo, current CEO of CDP, who started considering the possibility back in November 2017 – when he was still the Financial Director, while Claudio Costamagna was the Chairman.
Last August, in view of Minister Giovanni Tria’s mission in China, Palermo signed a preliminary collaboration agreement with Bank of China on the topics of supporting exports, financing infrastructural projects, and promoting environmental sustainability.
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