improve the pricing mechanism for their
primary issues.
The People’s Bank of China will allow
CHINA DEVELOPMENT BANK , EXPORT-IMPORT BANK
OF CHINA and AGRICULTURAL DEVELOPMENT BANK
OF CHINA greater flexibility in deciding the
final issue size for each offering, according
to the guidelines on the pilot scheme
published last Monday on the official
website of China Central Depository &
Clearing.
Currently, the three banks have to issue
the exact size they disclose in the bond
prospectus. Under the new rule, they will
be allowed to cut or increase by up to 50%
of the initial issue size.
The three banks should adhere to
market-based pricing for primary issues,
the PBoC said, and cross-holdings that
distort bond pricing are not allowed.
Issuers or underwriters are required
to give explanations when there is a big
discrepancy between yields on new issues
and their secondary pricing, it said.
Meanwhile, various forms of rebates to
investors will be forbidden, said the PBoC.
The PBoC can expand the pilot scheme
to include more financial institutions in the
future, it said.
The total outstanding onshore bonds of
the three policy banks stood at Rmb13.9trn
at the end of July, according to CCDC.
› OCEANWIDE RAISES COUPON
Property developer CHINA OCEANWIDE HOLDINGS
GROUP is proposing to raise the coupon on
Rmb3bn of onshore puttable bonds by
350bp.
The company said in a filing to the
Shanghai Stock Exchange that it would
raise the coupon on the six-year non-put
three notes issued in 2015 to 8.60% from an
initial coupon of 5.10%.
Bondholders can either sell back their
notes on September 13 or continue to hold
the notes with the new coupon for another
three years, it said.
Last week, the issuer, AA+ rated
by United Ratings, privately placed
Rmb300m three-year non-put two notes to
institutional investors at par to yield 8.20%
on the SSE.
› DAGONG SUSPENDED FROM ONSHORE
DAGONG GLOBAL CREDIT RATING has been
suspended from rating non-financial bonds
in China’s interbank bond market for
one year over conduct that breached local
regulations.
The National Association of Financial
Market Institutional Investors, which
oversees non-financial issuance in the
country’s interbank bond market, said
in a statement that Dagong had charged
issuers high fees for consulting services
at the same time as offering them rating
services in the period from November 2017
to March 2018.
Dagong was also found to have
made false statements during NAFMII’s
investigation into the business, the
regulator said.
“Dagong has violated the norms and
principles of the rating industry and has
failed to meet basic requirements for
compliance, causing seriously adverse
effects on the market,” NAFMII said.
Chinese financial magazine Caixin
reported last Friday that Dagong was
involved in promising rating upgrades
if issuers purchased a data management
consulting system it had developed, citing
unnamed sources.
Dagong did not immediately respond to
requests for comment.STRUCTURED FINANCE
› GLP PLANS DEBUT ABS IN CHINASingapore-based GLP is expanding its
sources of funding in China with its first
securitisation in the domestic market.
GLP Investment (Shanghai), a Shanghai-
incorporated unit of GLP, has submitted
a plan to the Shanghai Stock Exchange to
sell up to Rmb5bn (US$727m) asset-backed
securities, according to a preliminary filing.
Citic Securities is sole lead on the offering.
Since its debut Panda bond in July 2016,
GLP has become a frequent issuer in China,
raising funds in both the interbank bond
market and the exchange-traded bond
market.SYNDICATED LOANS
› JIFENG BACKS GRAMMER STAKE BUYAuto parts maker NINGBO JIFENG GROUP has
lined up a US$220m bridge loan to back its
acquisition of additional shares in German
peer Grammer.
Shanghai Pudong Development Bank is the
sole lender of the financing, which has
not been drawn yet. The terms of the
borrowing, including the deal size and
structure, will be finalised after Jifeng’s
tender offer for Grammer’s shares is
completed.
Grammer had been at the centre of
a power struggle between Jifeng and
Bosnia’s Hastor family, the German car
parts maker’s largest and second-largest
shareholders, respectively, which ended in
a win for the Chinese company.On July 23, 37.7% of Grammer shares
were tendered to Jifeng, meeting the
company’s lowered acceptance threshold
of 36%.
Jifeng, founded and controlled by Wang
Yiping and his family, is offering €61.25
per Grammer share, including dividends,
valuing the German peer at €772m
(US$882m).
It owned a 25.56% stake in the company
before the tender. The Hastor family has
tendered its stake in Grammer to Jifeng,
increasing the Chinese company’s stake to
74%.
Other investors have until August 23 to
tender their shares, and the transaction
is expected to be completed in the third
quarter.
Grammer’s management, which said
previously that its business would suffer
if the Bosnian family increased their
influence, has welcomed Jifeng’s bid.EQUITY CAPITAL MARKETS
› MEITUAN SEEKS LISTING APPROVALMEITUAN DIANPING , an online food delivery to
ticketing services provider, is set to seek a
listing hearing this week for a Hong Kong
IPO of at least US$4bn, according to people
close to the deal.
The company plans to start pre-marketing
the deal in the week of August 27 if the
approval is granted, said the people.
Meituan Dianping will be another
sizable IPO in Hong Kong this year after
the HK$54.3bn (US$6.92bn) listing of China
Tower and the HK$42.6bn float of Xiaomi.
Meituan Dianping, backed by Chinese
internet giant Tencent Holdings, filed a
listing application in June.
According to the filing, Meituan Dianping
posted a loss of Rmb18bn (US$2.9bn) in
2017, versus a loss of Rmb5.8bn in 2016. Its
unaudited adjusted net loss was Rmb2.9bn.
Meituan Dianping was valued around
US$30bn in a fundraising round last year.
Bank of America Merrill Lynch , Goldman Sachs
and Morgan Stanley are joint sponsors for
the deal. China Renaissance is the financial
adviser.
Wang Xing owns 11.4% of the company
through 573m class A shares that carry
voting rights of about 48.4%. Tencent owns
20.1% and Sequoia Capital 11.4%.› ANE LOGISTICS PLANS US IPOANE LOGISTICS , backed by private equity firms
including Carlyle and Warburg Pincus,
plans to raise about US$500m from a US
IPO in 2019, according to people familiar
with the situation.