Bank Of China Issues First 'Schengen Bond' In Luxembourg

By Editorial 15 May, 2014

On May 8, Bank of China, one of the big four state-owned Chinese commercial banks, successfully launched the offshore renminbi (RMB) 'Schengen bond' – the first of its kind to be issued by a company from the Chinese Mainland and listed in the Eurozone.

The three-year bond, priced at 3.50 percent, amounts to a total of RMB1.5bn (USD240.8m), is issued under the USD10bn MTN program of the Bank of China Group, and will be listed on the Euro MTF market of the Luxembourg Stock Exchange.

Robert Scharfe, CEO of the Luxembourg Stock Exchange, declared that, "the choice of Luxembourg as the listing place demonstrates the confidence of the Bank of China Group towards Europe, and especially Luxembourg as a prime international financial center. This listing also strengthens our number one position in the world for the listing of offshore RMB denominated bonds outside Asia."

To contrast it with 'Dim Sum' bonds, which are offshore RMB bonds issued by Chinese companies and listed in Hong Kong, it was noted that, as a new facet in the internationalization of the RMB, this first European RMB bond was named "Schengen bond" using the name of a small village at the borders of Luxembourg, France, and Germany which stands for free movement within Europe.

Lihong Zhou, the General Manager of the Luxembourg branch of Bank of China Limited, commented: "The successful launch of this Schengen bond is a further step towards the internationalization of the Renminbi, and shows the commitment of Bank of China to promote Luxembourg as a leading RMB financial center in Europe."

A comprehensive report in our Intelligence Report series giving a country-by-country analysis of offshore investment funds, stock exchanges and trusts, with an analysis of the US QI regime, is available in the Lowtax Library at and a description of the report can be seen at

Tags: Investment | Banking | Capital Markets | China | Luxembourg | Offshore | Stock Exchanges | Offshore Banking | Currency | Expats | Europe |


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