Agricultural Bank of China Issues RMB20 Billion Green Bonds at Record-Low 1.51%

Agricultural Bank of China recently issued RMB20 billion in three-year green financial bonds on the interbank market at a coupon rate of 1.51%, setting a record low for the bank's green bond issuances. The bonds featured a tap issuance mechanism, with final issuance of RMB20 billion and a subscription ratio of 1.6 times.

Since the second half of the year, the issuance window for commercial bank green bonds has reopened, with multiple banks issuing in quick succession. Bank of Communications issued the first tranche of its 2026 green financial bonds on July 28, with a base scale of RMB5 billion, attracting 40 institutions and expanding to a final total of RMB20 billion. Bank of Shanghai issued RMB5 billion on July 23 with a subscription ratio exceeding 3 times. China Minsheng Bank issued RMB15 billion on July 21 with a three-year tenor. Postal Savings Bank of China issued RMB5 billion on July 17, with a subscription ratio of 3.99 times and 71 participating institutions. Bank of Jiangsu issued RMB5 billion on July 15. Qilu Bank completed its RMB6 billion issuance on August 5.

The recently issued green bonds generally carry three-year terms with coupon rates mostly in the 1.45% to 1.60% range. Agricultural Bank of China's coupon is 1.51%, Qilu Bank 1.60%, China Minsheng Bank 1.50%, Bank of Shanghai 1.50%, and Bank of Jiangsu 1.49%. Bank of Communications used a floating-rate structure with a first-period coupon of 1.52%. Postal Savings Bank of China's first tranche was a fixed-rate bond at 1.46%, while its second tranche was floating-rate with an initial coupon of 1.48%.

Several banks disclosed that proceeds from the green bond issuances will fund green industry projects under the Green Finance Support Project Catalogue (2025 Edition). Postal Savings Bank of China issued the first carbon-neutral themed green financial bond, with proceeds entirely allocated to green industry projects with significant carbon reduction benefits. Bank of Shanghai will focus on energy conservation and carbon reduction, resource recycling, green low-carbon energy transition, and green upgrades of infrastructure. As of the end of the second quarter of 2026, the balance of onshore and offshore green loans stood at RMB48.63 trillion, up RMB3.82 trillion in the first half, a year-on-year increase of 14.5%.