› CINDA BUYS DEFAULTED BERUN NOTES
China Cinda Asset Management has bought
all the defaulted onshore bonds issued by
INNER MONGOLIA BERUN GROUP, a privately owned
Chinese conglomerate.
Berun said in a filing that the state-
owned bad-debt manager had bought
Rmb3bn of defaulted notes and was
negotiating an overall debt solution with
the company.
It did not disclose the price the notes
were sold to Cinda.
In late 2016, Berun defaulted on
Rmb1.1bn 270-day onshore notes after
failing to make due payment and later
defaulted on two other notes totalling
Rmb1.9bn.
Cinda, which was originally set up to
acquire bad debt from China's state-run
banks, has broadened its focus to include
distressed bonds.
In December 2016, Cinda agreed
to acquire defaulted bonds of up to
Rmb6.8bn in face value issued by
Shandong Shanshui Cement Group, the
mainland subsidiary of Hong Kong-listed
China Shanshui Cement.
› HSBC (CHINA) MAKES ONSHORE RETURN
HSBC BANK (CHINA) has returned to China's
interbank bond market for funding after a
domestic bond offering four months ago,
pricing Rmb4bn of three-year notes at par
to yield 4.23%. The offering was 1.68 times
covered.
Both the issuer and the notes have AAA
ratings from China Chengxin.
Haitong Securities was lead underwriter
and bookrunner with Bank of Communications
and Guotai Junan Securities as joint lead
underwriters. HSBC Qianhai Securities was
financial adviser.
It was HSBC China's third offering under
its Rmb10bn bond programme approved by
the People's Bank of China.
In May, the bank printed Rmb3bn of
three-year notes at par to yield 4.74%.
› FANTASIA CLEARED FOR ONSHORE
FANTASIA HOLDINGS GROUP has won regulatory
approval to issue up to Rmb2.9bn of
onshore bonds.
Fantasia Group (China), an onshore
subsidiary of the Hong Kong-listed Chinese
property developer, has been approved by
the Shanghai Stock Exchange to go ahead
with the public bond offering, according to
a preliminary filing to the SSE.
The issuer, rated AA+ by China
Chengxin, intends to use the proceeds to
meet a redemption of onshore bonds. It
has Rmb3.1bn of onshore bonds that are
puttable for the remainder of this year.
Huatai United Securities is sole lead on the
offering.SYNDICATED LOANS
› CNBM MULLS CHANGING GUARANTORCNBM (HONG KONG) is considering changing the
guarantor on a debut US$160m three-year
term loan in a move that could lead to a
reduction in the pricing.
The borrower is looking to replace
current guarantor China National Building
Materials & Equipment Import & Export
Corp with its parent China National
Building Materials Group.
The latter has a stronger financial profile
than its subsidiary and is directly owned
by the State-owned Assets Supervision
and Administration Commission, which
acts as the owner of various state-backed
enterprises on behalf of the central
government.
Several lenders, which were processing
approvals for the deal, are now awaiting a
final decision from the borrower.
Mandated lead arrangers and
bookrunners BNP Paribas, Credit Agricole CIB
and Taipei Fubon Commercial Bank launched
the deal in late July offering a top level
all-in pricing of 240bp based on a margin of
190bp over Libor.
The original deadline for commitments
was September 3.› OPTOELECTRONIC PARTS MAKER DEBUTSShenzhen-listed O-film Tech is making its
loan market debut with a US$100m three-
year facility.
CTBC Bank is the mandated lead arranger
and bookrunner of the transaction, which
offers an interest margin of 160bp over
Libor and has an average life of 2.475 years.
MLAs committing US$20m or more will
receive a top-level all-in pricing of 188.3bp
via a participation fee of 70bp, while lead
arrangers joining with US$15m–$19m
earn an all-in of 182.2bp via a 55bp fee.
Arrangers coming in for US$10m–$14m will
receive an all-in of 176.2bp via a 40bp fee.
A site visit to Shenzhen was held on
Friday. Commitments are due on October
19.
O-FILM GLOBAL (HK) TRADING, a unit of O-film
Tech, is the borrower, while the parent
company is the guarantor.
Funds are for refinancing and working
capital purposes.
O-film Tech is a manufacturer of optical
and optoelectronic components, including
touch display, sensor and smart car
products.› ZHENGTONG BACK FOR US$150M LOANHong Kong-listed car dealership CHINA
ZHENGTONG AUTO SERVICES HOLDINGS is back for a
loan of up to US$150m, eight months after
obtaining a bigger borrowing.
Cinda International Asset Management is
the lead adviser, while Taiwan Cooperative
Bank is the mandated lead arranger and
bookrunner.
The deal has a base size of US$100m with
a greenshoe option of US$50m. General
syndication is expected to be launched as
soon as next week.
In January, ZhengTong raised an
increased US$380m three-year loan, which
paid an all-in pricing of 369bp over Libor
based on an interest margin of 315bp
and an upfront fee of 110bp. Morgan
Stanley was the global coordinator and
administrative agent, while Bank of Taiwan
was the original Taiwan MLAB.
ZhengTong mainly retails premium
automobile brands such as BMW, Jaguar,
Land Rover, Audi, Volkswagen and Volvo.
For the six months ended June 30 2018,
the company recorded a gross profit of
Rmb2.3bn (US$336m), representing a year-
on-year increase of 32.9%. CORRECTION The article ”CAS
Engineering faces action over default”
in our September 8 issue inaccurately
listed Morgan Stanley as one of the
parties taking legal action against CAS
Engineering. We wish to make clear that
Morgan Stanley is not part of the banking
group suing the borrower.EQUITY CAPITAL MARKETS
› BOOKS COVERED FOR HAIDILAO IPOThe books of HAIDILAO INTERNATIONAL’s Hong
Kong IPO of up to HK$7.57bn (US$964m)
are multiple times covered at the top end
of the indicative price range, according to
people close to the deal.
The deal has attracted strong demand
from investors, despite the company
selling shares at a premium valuation to
its peers.
Haidilao, one of China’s most popular
hotpot restaurant chains, is selling about
425m shares, or 8.01% of its enlarged share
capital, in an indicative price range of
HK$14.80–$17.80 each.
The price range represents a 2019 P/E of
25.1–30.2 and values the company at about
US$10bn–$12bn.
Shares of Hong Kong-listed Chinese
hotpot restaurant chain Xiabu Xiabu
Catering Management changed hands at
around a 2019 P/E of 20x.