Bank of China Ltd completed the issuance of Belt and Road Initiative themed, $3.8 billion equivalent multi-currency bonds on Thursday to raise low-cost funding for medium and long-term projects related to the initiative.

Eight types of bonds were issued this time in five currencies, which are the US dollar, the euro, the renminbi, the Hong Kong dollar and Macao pataca, by Bank of China's branches in Luxembourg, Frankfurt, Sydney, Hong Kong and Macao.

All the bonds issued will be listed on the Hong Kong Exchanges and Clearing Ltd's markets, and some types of the bonds will also be listed on the China Europe International Exchange, the Frankfurt Stock Exchange and the Luxembourg Stock Exchange.

Ever since 2015, BOC, the fourth-largest commercial lender by assets in China, has issued BRI themed bonds five times in seven currencies, with a total value of $14.6 billion.

"The interest of international investors, especially European investors, in BRI themed bonds has grown significantly in the past few years," said Liu Xinqun, general manager of the treasury department at BOC.

European investors accounted for 83 percent of the investors for the euro-denominated bonds issued in the latest round, up 47 percentage points compared with the first issuance in 2015.

The bond premium also kept declining in the past few years. For a three-year fixed rate, euro-denominated BRI themed bond issued by BOC this time, the coupon rate was 48 basis points higher than the midswap rate－the reference rate which is used to calculate the premium that a bond buyer will pay. The difference between the coupon rate and the midswap rate dropped by about 45 basis points from that of the first issuance.

Similarly, for the bank's three-year floating rate BRI themed bonds denominated in US dollar, the difference between the coupon rate and Libor (London interbank offered rate) also shrank by about 35 basis points during the same period, demonstrating that global investors have stronger confidence in collaboration on BRI related projects, Liu said.

Chen Longjian, vice-president of Bank of China's Luxembourg branch, said that as a participant in the latest issuance, the Luxembourg branch issued a three-year floating rate bond worth $500 million, which received a warm response from global investors, recording an oversubscription rate of 4.6 times.

Some ultra-high-quality investors such as central banks also participated in the bond subscription, according to BOC.

Unlike previous issuances, the investors raised various questions about the bank's BRI related projects in terms of non-performing loan ratios, return on investment, geographical distribution and major directions of investment, rather than simply showing concern about the bank's creditworthiness and operating conditions.

"Nowadays, investors are more willing to have a deeper understanding of the Belt and Road Initiative," Liu said.

Over the past few years, Bank of China has continuously improved its global layout, especially in economies along the Silk Road Economic Belt and the 21st Century Maritime Silk Road, jointly known as the BRI.

Up to now, the bank has established overseas institutions in 24 countries and regions associated with the BRI. It has followed up more than 600 major BRI projects and granted credit totaling more than $130 billion to economies taking part in the initiative. The ongoing projects involved total investments exceeding $455 billion.

The bank has also intensified cooperation with foreign government agencies and financial institutions, holding seminars on international financial exchanges and cooperation for delegates from 27 countries since 2015, with the aim of giving a comprehensive introduction of BRI to senior foreign government officials.

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