Clifford Chance

Clifford Chance advises on wave of hybrids, dim sums and vanilla bonds

Leading international law firm Clifford Chance has advised on RMB15.5 billion of dim sum bonds and a total of US$10.8 billion across perpetual capital securities, convertible bonds and straight USD notes issuances since April this year. These issuances utilised different credit structures from direct issue to credit enhancements with parent guarantee, keepwell deed or a standby letter of credit from a bank.

Most recently, it advised the joint lead managers on China Huarong Asset Management's US$300 million 3% guaranteed notes due 2017 and US$1.2 billion 4% guaranteed notes due 2019.

Notable RMB transactions included advising Hang Seng Bank (China) on its debut offshore issue of RMB1 billion notes due 2017. In May, the firm also advised the lead managers on Bank of Tokyo-Mitsubishi UFJ (China)'s RMB 1 billion bond issue, the first by a China-based Japanese bank.

The Clifford Chance capital markets team has also worked on a number of hybrid transactions including perpetual securities issues by Chalco and Far East Horizon, and convertible bonds by Rexlot Holdings and Crotona Assets Limited guaranteed by Kingdee International.

Capital Markets partner Connie Heng said, "The DCM market has been incredibly buoyant over the past 12 months. We have seen a resurgence in dim sum bond issuances, particularly by financial institutions, who have tapped the offshore RMB market for capital needs, rather than the more speculative nature of dim sum issuances that we saw previously."

Partner Matt Fairclough adds, "There is still a lot of liquidity in the market and we expect to see a steady flow of issuances in the upcoming six months. In particular, hybrid securities are becoming more popular as it provides a more flexible fundraising option for issuers."

A full list of transactions is found below.

USD notes issuances

China Huarong Asset Management Co Ltd – Advised the joint lead managers on the issue of US$300 million 3% guaranteed notes due 2017 and US$1.2 billion 4% guaranteed notes due 2019 by Huarong Finance Co Ltd, unconditionally and irrevocably guaranteed by Huarong (HK) International Holdings Limited and with the benefit of a keepwell deed and a deed of equity interest purchase, investment and liquidity support undertaking by China Huarong Asset Management Co Ltd.

China Metallurgical Group Corporation  –  Advised the joint lead managers on the US$500 million 2.625% due 2017 credit enhanced bonds issuance by MCC Holding (Hong Kong) Corporation Limited with the benefit of a keepwell deed provided by China Metallurgical Group Corporation and an irrevocably letter of credit from Bank of China Limited, London Branch.

China Overseas Land & Investment – Advised the underwriters on the issue of (i) US$800 million 4.25% guaranteed notes due 2019; (ii) US$700 million 5.95% guaranteed notes due 2024; and (iii) US$500 million 6.45% guaranteed notes due 2034 by China Overseas Finance (Cayman) VI Limited unconditional and irrevocably guaranteed by China Overseas Land & Investment Ltd.

China Overseas Land & Investment – Advised the underwriters on the issue of US$550 million 4.25% guaranteed notes due 2019 and US$450 million 5.95% guaranteed notes due 2024 by China Overseas Finance (Cayman) VI Limited, unconditionally and irrevocably guaranteed by China Overseas Land & Investment Ltd.

DBS – Advised DBS Group Holdings Ltd on the issue of US$750 million 2.246% notes due 2019 and US$500 million floating rate notes due 2019 under its US$15 billion GMTN programme.

Goodman HK Finance – Advised the underwriters on the issue of US$400 million 4.375% guaranteed notes due 2024 under its US$2 billion EMTN programme unconditionally and irrevocably guaranteed on a joint and several basis by Goodman Hong Kong Logistics Fund and Goodman HK investments.

Haitong Securities Co Ltd / UT Capital Group Co Limited – Advised Unican Limited on the establishment of US$1 billion guaranteed MTN programme unconditionally and irrevocably guaranteed by UT Capital Group Co Limited with the benefit of a keepwell deed provided by Haitong Securities Co Ltd.

Olam – Advised the underwriters on the issue of US$300 million 4.5% notes due 2020 and S$400 million 4.25% notes due 2019 issued by Olam International Limited.

Tencent – Advised Deutsche Bank as arranger in the establishment of Tencent Holdings Limited's US$5 billion GMTN Programme and advising a manager syndicate led by Deutsche Bank, Barclays and JP Morgan as joint lead managers in the subsequent drawdown of US$500 million 2.00% notes due 2017 and US$2 billion 3.375% Notes due 2019.

RMB notes issuances

Agricultural Development Bank of China – Advised the underwriters on the issue of RMB2 billion 3% bonds due 2016 by Agricultural Development Bank of China.

Bank of Tokyo-Mitsubishi UFJ (China) – Advised the lead managers on the issue of RMB1 billion 3.05% bonds due 2017.

China Minmetals Corporation - Advised China Minmetals Corporation on the issue of RMB2 billion 4.25% bonds due 2017.

China Power International Development Limited – Advised the underwriters BOC International, Bank of China, Bank of Communications and ICBC on the RMB2 billion 4.5% bonds due 2017 issued by China Power International Development Limited.

eSun Holdings Limited – Advised the underwriters on the issue of RMB650 million 8.375% secured guaranteed notes due 2018.

Hainan Airlines (Hong Kong) Co. Limited – Advised the joint lead managers, UBS, J.P. Morgan, CCB International, CLSA, DBS, Deutsche Bank, Hong Kong International Securities Limited and ICBC, on the issue of RMB1.7 billion 6.25% guaranteed bonds due 2017 by Hainan Airlines (Hong Kong) Co., Ltd.

Hang Seng Bank (China) - Advised Hang Seng Bank (China) on its debut offshore issue of RMB1 billion 3.25% notes due 2017.

Hua Xia Bank – Advised the sole bookrunner on the debut offshore issue by Hua Xia Bank Co., Limited of RMB1 billion 4.95% bonds due 2017.

Lai Sun Garment – Advised the underwriters on the issue of RMB650 million 7.7% secured guaranteed notes due 2018 unconditionally and irrevocably guaranteed by Lai Sun Garment (International) Limited.

Overseas Chinese Town / Sure Best Management Limited – Advised on the issue of RMB1 billion 4.75%guaranteed notes due 2017 by Sure Best Management Limited unconditionally and irrevocably guaranteed by Overseas Chinese Town (HK) Company Limited and with the benefit of a keepwell and liquidity support deed and a deed of equity interest purchase undertaking by Shenzhen Overseas Chinese Town Company Limited.

Power Construction Corporation of China - Advised Power Construction Corporation of China on the issuance of RMB1.5 billion 4.2% notes due 2017.

Shanghai Pudong Development Bank Co Ltd – Advised the joint lead managers, Bank of China, HSBC, Shanghai Pudong Development Bank, Citigroup and  Standard Chartered, on the issue of RMB1 billion 4.08% bonds due 2017 by Shanghai Pudong Development Bank Co Ltd.

Convertible bonds

Kingdee International Software Group Company Limited/Crotona Assets Limited – Advised the underwriters Credit Suisse and Macquarie on the US$150 million 4% guaranteed convertible bonds due 2019 issued by Crotona Assets Limited with an option to increase the principal amount up to US$25 million unconditionally and irrevocably guaranteed by Kingdee International Software Group Company Limited.

Rexlot Holdings Limited – Advised the joint lead managers on the issue of HK$1.9 billion 4.5% convertible bonds due 2019.

Perpetuals

Aluminum Corporation of China Limited - Advised Chalco Hong Kong Investment Company Limited on the issue of US$400 million 6.25% senior perpetual capital securities.

China Railway Construction Corporation Limited / CRCC Yupeng Limited – Advised Citigroup, HSBC, DBS, BNP Paribas, UBS as joint lead managers on CRCC Yupeng Limited's issuance of US$800 million 3.95% senior guaranteed perpetual securities guaranteed by China Railway Construction Corporation Limited. 

Far East Horizon - Advised Far East Horizon Limited on the issue of US$200 million 5.55% senior perpetual capital securities.