offering of US dollar senior unsecured
bonds, subject to market conditions.
The state-owned group, based in
Liangshan Yi Autonomous Prefecture of
China’s southwestern Sichuan province,
started to meet investors in Hong Kong and
Singapore on December 5.
Wholly owned offshore subsidiary Liang
Shan International Development will be
the issuer of the proposed Reg S bonds and
parent LSID the guarantor.
The bonds are expected to be rated on
par with the guarantor, which is rated BB+
(stable) by Fitch and BBB– (stable) by Lianhe
Global.
LSID is the sole financing and investment
vehicle responsible for the prefecture’s
mineral product and hydro-electricity
operations as well as transport and
infrastructure construction, according to
Fitch.
The State-owned Assets Supervision and
Administration Commission of Liangshan
owns 57.13% of LSID with the remaining
42.87% owned by various county-level
SASACs or treasuries.
› REWARD DEFAULTS ON ONSHORE BOND
REWARD SCIENCE AND TECHNOLOGY INDUSTRY GROUP’s
dollar bonds have plunged after it defaulted
on one of its onshore bonds.
The Chinese diary producer defaulted
on its Rmb300m (US$43.6m) 7.5% 365-day
bonds due December 6, according to a
filing on the Shanghai Clearing House.
The principal and interest accrued totalled
Rmb322.5m.
The company said it would try to raise
funds through various channels to repay
the principal and interest.
A bond trader said Reward’s dollar bonds
faced heavy selling pressure immediately
after the default news. Its 7.25% 2020s
slumped 20–25 points to around 35, he said.
Moody’s downgraded Reward to B3
from B2 in December 2017 after the China
Securities Regulatory Commission criticized
the company for regulatory violations,
including a misappropriation of funds
from onshore bond proceeds, inadequacies
in information disclosure, weak financial
management and poor accounting quality.
› VANKE PRINTS 5.25-YEAR BOND
Property developer CHINA VANKE, rated Baa1/
BBB+/BBB+, has drawn over US$1.5bn
in final orders from 108 accounts for its
US$630m senior unsecured bond offering.
The 5.35% 5.25-year bonds were priced at
99.909 to yield 5.372%, or Treasuries plus
250bp, the tight end of final guidance of
250bp-255bp, and well inside initial 285bp
area guidance.
Of the notes, 92% went to Asia and 8%
to EMEA. By investor type, 45% went to
asset managers and fund managers, 31%
to banks, 18% to insurers and sovereign
wealth funds, and 6% to private banks.
Vanke Real Estate (Hong Kong) Company
is the issuer and China Vanke is the
keepwell and equity interest purchase
undertaking provider. The Reg S notes have
expected ratings of Baa2/BBB/BBB+.
The Shenzhen and Hong Kong-listed
company plans to use the proceeds to
refinance offshore debt and for general
corporate purposes.
BOC International, Credit Suisse, UBS, China
International Capital Corp, Goldman Sachs,
Mizuho Securities and Morgan Stanley were
joint bookrunners and joint lead managers.› ZHUJI STATE-OWNED AM PRINTS DEBUTZHUJI STATE-OWNED ASSETS MANAGEMENT, rated
Baa3 (stable) by Moody’s, has priced a
US$230m debut offshore bond offering for
general corporate purposes.
The state-owned group, based in Zhuji
city in China’s Zhejiang province, priced
the three-year senior unsecured bonds at
par to yield 7.00%, inside initial 7.25% area
guidance.
Wholly owned BVI subsidiary Zhuji
Development is the issuer and the state-
owned parent is the guarantor. The Reg S
bonds have an expected Baa3 rating from
Moody’s.
China Securities International and DBS Bank
were joint global coordinators, joint lead
managers and joint bookrunners. China Citic
Bank International and Silk Road International
were added as joint lead managers and
joint bookrunners at a later stage.
Zhuji State-owned Assets Management is
the Zhuji municipal government’s largest
investment, financing, urban construction
and industrial innovation vehicle, with a
wide range of local business activities.› HCIG CONNECTS WITH DIM SUMHUZHOU COMMUNICATIONS INVESTMENT GROUP
priced Rmb500m three-year Dim Sum
bonds at par to yield 5.9%, in line with
initial guidance.
The senior unsecured bonds are expected
to be rated BBB– by Fitch, in line with the
issuer.
Guosen Securities (HK), ABC International,
CCB International and Industrial Bank, Hong
Kong branch were joint global coordinators
and bookrunners. Silk Road International was
bookrunner.
Proceeds from the Reg S offering will
be used for working capital and general
corporate purposes.
The group is one of the major state-owned assets operation and management
vehicles in Huzhou, Zhejiang province,
with businesses including toll roads,
commodity trading, infrastructure
construction and services.› ZHONGRONG XINDA SAYS NO DEFAULTZHONGRONG XINDA GROUP has settled a dispute
with DBS Bank’s Shanghai branch and has
not defaulted or accumulated arrears on its
loans or bonds, the Chinese coke producer
said in a filing on the Shanghai Clearing
House on Thursday.
Zhongrong Xinda also said that it has
paid interest on its US$500m 7.25% bonds
due 2020 on schedule since the bonds were
issued in October last year and there were
no cross-defaults due to the dispute.
There were reports earlier that
Zhongrong Xinda and DBS Bank’s Shanghai
branch had a dispute over a Rmb300m
bilateral bank loan.
Zhongrong Xinda said in the statement
that the company’s operations are normal
and that its overall debt repayment
pressure is low.
The company said it has redeemed bonds
for a total of Rmb14.4bn so far this year.
It completed a Rmb1.5bn three-year bond
issue on December 4.
S&P on December 4 said the settlement
of the dispute with DBS avoids liquidity
pressure on the coke producer.
Still, the rating agency said it continues
to assess Zhongrong Xinda’s liquidity as less
than adequate, given the company’s high
reliance on short-term debt financing.
However, it does not anticipate imminent
liquidity stress because Zhongrong Xinda
has paid off all its bonds due in 2018, using
operating cashflows and bank loans.
S&P said Zhongrong Xinda’s relationships
with domestic banks have been stable in
2018, the company has secured more credit
lines and it has also been able to roll over
short-term bank loans in 2018.
Zhongrong Xinda’s 7.25% 2020s were
quoted at 56.50/59.00 on Thursday,
according to Tradeweb. The bonds were
trading at around 67 in early November.
Both S&P and Fitch in July downgraded
Zhongrong Xinda’s and its dollar bonds
ratings. S&P cut the company’s rating to
B from BB– while Fitch cut the company’s
rating to B– from BB–.
The 7.25% 2020s are rated B/B– (S&P/
Fitch), on par with the company’s rating.
DBS did not respond to a request for
comment.› CHINA GAS PLANS PANDA ISSUEBermuda-incorporated CHINA GAS HOLDINGS
plans to issue Rmb1.3bn of Panda bonds in