Asia took 99% of the bonds and Europe
1%. By investor type, 73% went to banks and
funds, 15% to insurance and corporates, and
12% to private banks.
The infrastructure construction group
for Anhui’s provincial government plans
to use the proceeds for infrastructure
construction, industrial investment,
refinancing of the group’s existing debt and
general corporate purposes.
Barclays and Bank of China were joint
global coordinators, as well as joint
bookrunners with Industrial Bank Hong
Kong branch. Guoyuan International was
added as a joint bookrunner at the final
stage.
› BESG PRINTS US$225M THREE-YEAR
BEIJING ENVIRONMENT SANITATION ENGINEERING
GROUP, rated BBB/BBB+ (S&P/Fitch), printed
US$225m three-year bonds after drawing
final orders in excess of US$1.4bn from 65
accounts.
The Reg S notes were priced at par to
yield 5.30%, the tight end of final guidance
of 5.35%, plus or minus 5bp, and well inside
initial guidance of 5.65% area.
Asia took 99% of the bonds and EMEA 1%.
By investor type, 53% went to banks, 42%
to funds and insurance, and 5% to private
banks and others.
Beijing Environment (BVI) will issue the
bonds with a guarantee from BESG. The
senior unsecured bonds are expected to be
rated BBB+ by Fitch.
Proceeds will be used for refinancing
debt and for general corporate purposes.
ICBC International, ABC International, DBS
Bank, China Merchants Securities (HK) were
joint global coordinators. They were
also joint bookrunners with HSBC, CCB
International, Bank of China, CMB Wing Lung
Bank, Huatai Financial Holdings (Hong Kong)
and CEB International.
BESG is an environmental services
company wholly owned by the Beijing
municipal government. It met investors in
mid-September to discuss a proposed issue
of euro-denominated three-year bonds,before changing its plans and announcing a
dollar mandate this month.› CDB FINANCIAL LEASING HIRESCHINA DEVELOPMENT BANK FINANCIAL LEASING (A1/A/
A+) has hired banks to arrange investor
meetings in London, Singapore and Hong
Kong from October 15.
Bank of Communications, China Citic Bank
International, Citigroup, Goldman Sachs,
Mizuho and Standard Chartered are joint
global coordinators. They are also joint
bookrunners with AMTD, Bocom International,
Credit Agricole, NAB, Natixis and Westpac.
A US dollar senior unsecured fixed or
floating-rate Reg S transaction may follow,
subject to market conditions.
Wholly owned subsidiary CDBL Funding
1 will issue the notes with a guarantee
from CDB Aviation Lease. The notes will
have the benefit of a keepwell and asset
purchase deed provided by CDB Financial
Leasing and are expected to be rated A1/A+
(Moody’s/Fitch).Sichuan Development prints debut
Bonds Issue is one of the largest among recent prints by LGFVsSICHUAN DEVELOPMENT HOLDING, rated A– by
Fitch, last Wednesday priced US$500m
senior unsecured notes in its first US dollar
bond offering, achieving one of the largest
prints among recent issues by Chinese local
government financial vehicles.
The three-year Reg S notes were priced
at par to yield 4.80%, or Treasuries plus
191.1bp, well inside initial guidance of 5.1%
area.
Sichuan Development Holding, a state-
owned investment and asset management
platform in the southwestern Chinese
province, met investors in Singapore
and Hong Kong in June but waited until
Wednesday to launch the deal.
“The timing was terrible in June, when
new issues from the LGFV segment almost
shut down amid default concerns and weak
market sentiment. It just waited for a better
window,” said David Yim, regional head of
capital markets, greater China & North Asia
at Standard Chartered, one of the joint global
coordinators on the deal.
Yim said the issue has garnered support
from investors thanks to the company’s
leading position in Sichuan. This allowed the
company to price the issue with the lowest
yield and the biggest issue size among recent
similarly rated new LGFV issues in the past
two months. Most of these have been in therange of US$300m-$400m with a yield of
4.9%-5.0%.
“The company has total assets of almost
Rmb1trn, which is bigger than many central
state-owned enterprises. It accounts for
80% of the assets of all SOEs directly
supervised by Sichuan Sasac (State-owned
Assets Supervision and Administration
Commission), which is strategically
important to the Sichuan government,” he
said.
Nomura’s trading desk in a note on
Wednesday had advised investors to
participate in the deal with final guidance of
no less than 4.9%. This is flattish compared
with the secondary market yield levels of
Sichuan Provincial Investment Group’s
4.625% 2021s and Anhui Transportation
Holding Group’s 4.875% 2021s, and about
50bp inside the unrated Shandong Hi-Speed
Group’s 4.00% 2020s.
Final statistics for the deal were not
available at the time of writing but orders
were said to be over US$1.6bn, including
interest from joint lead managers, at the time
final guidance was released.
The notes will be issued by Yieldking
Investment and guaranteed by Sichuan
Development International Holding, with
the benefit of a keepwell deed and a deed
of equity interest purchase undertakingprovided by Sichuan Development Holding.
Both the issuer and the guarantor are
wholly owned subsidiaries of Sichuan
Development Holding. The notes have
expected ratings of A– from Fitch.
Proceeds will be used for general
corporate purposes.
The newly priced notes traded down in
the secondary market and were quoted at
99.25/99.60 on Thursday afternoon.
Standard Chartered, CMBC Capital,
Guotai Junan International and Shanghai
Pudong Development Bank Hong Kong
branch were joint global coordinators. They
were also joint bookrunners and joint lead
managers with China Citic Bank International,
Shenwan Hongyuan Securities (HK), Haitong
International, China Minsheng Banking Corp
Hong Kong branch and Oceanwide Securities.
Cantor Fitzgerald (Hong Kong) Capital
Markets and Natixis were on the bookrunner
list during the marketing but were not on the
list when the deal was priced.
Sichuan Development Holding invests
in and controls a number of specialised
investment and financing companies in
various industries, including principally the
construction and operation of transportation
infrastructure, commodity trading and power
generation. It issued Dim Sum bonds in 2014.
CAROL CHAN