Fangda advises on BMW’s first public offering of panda bonds

Fangda represented BMW Group on its RMB3.5 billion panda bond offering, priced on June 10, 2021. BMW Finance N.V., a BMW Netherlands finance company subsidiary, was the issuer, with the bonds guaranteed by its parent. The bonds comprise RMB2 billion 3-year medium-term notes (MTNs) and RMB1.5 billion 1-year commercial paper (CP). The MTNs were priced at an annual coupon rate of 3.44% and the CPs at 3.03%. The bonds were offered to institutional investors in and outside China (including through the Bond Connect regime) on China’s interbank bond market. The offering was more than three times over-subscribed with approximately half of the orders from overseas investors.

This is the first public offering of panda bonds by a European non-financial institution (non-FI) corporate, as well as the first public offering of panda bonds by an international non-FI corporate issuer under the new corporate panda bond rule adopting a tiered management regime. It is also the first public offering of guaranteed panda bonds issued by a finance company and guaranteed by its parent. BMW has previously been an active issuer of panda bonds through private placements.

Fangda, as the issuer’s counsel, drafted all the transaction documents in English and Chinese and advised BMW Group on all aspects of the transaction. The Fangda team was led by the partner Christine Chen with key members including Helen Zhao, Sophie Li and Hailey Ma. Helen Wang and Leanne Liu provided support in deal execution.