Luxembourg Stock Exchange partners with China’s Agricultural Development Bank (ADBC) to expand the green bond market
The Luxembourg Stock Exchange (LuxSE) signs a Memorandum of Understanding (MoU) with the Agricultural Development Bank of China (ADBC), the second largest policy bank in China. The purpose of the MoU is to set up an access scheme to display ADBC’s green, poverty alleviation and sustainability bonds on the Luxembourg Green Exchange (LGX) platform. International investors will gain access to detailed information in English about Chinese green bonds issued by ADBC, traded on the Chinese Interbank Market (CIBM) and accessible through the Bond Connect scheme.
All eligible ADBC bonds will be displayed on the Luxembourg Green Exchange, the first and only exchange-operated platform entirely dedicated to green, social and sustainable instruments. “The future of finance needs to be green. We are promoting information connectivity between China and Europe which perfectly inscribes into the objectives of the Belt and Road Initiative. Our agreement with ADBC is fundamental for the creation of a global green bond market”, comments Robert Scharfe, CEO of LuxSE.
The aim of the agreement between ADBC and LuxSE is to bridge the Chinese interbank market with international investors and facilitate the acquisition of ADBC green bonds by investors located outside China. This will be achieved through enhancing international visibility and transparency of ADBC’s green, poverty alleviation and sustainability bonds as all information relating to the instruments, e.g. the planned use of proceeds, external opinions, etc., will be published in English.
“This is the first time information related to ADBC’s domestic green bonds will be displayed on an international stock exchange. It will facilitate connectivity among China and international investors”, comments Yin Jiuyong, CCP Committee Member and Vice President of ADBC.
“This is a historic moment for the Luxembourg Stock Exchange. ADBC’s securities will be the first CIBM-traded green bonds displayed on LGX. It is a very strong signal for the international investor community”, adds Robert Scharfe.
ADBC, one of the country’s three policy banks, rated A+/A1, as is China[1], is the second biggest interbank market issuer in China and one of the biggest issuers of domestic green bonds. The bank is responsible for the food security of China and some 50 percent of its lending goes to the purchase of grains and cereal reserves. Among the bank’s responsibilities is to ensure farmers’ income growth by financing rural infrastructure. It employs over 50,000 people.
[1] S&P Global Ratings/Moody’s
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