State Grid has completed a landmark RMB14.9 billion (USD2.22 billion) issuance of offshore renminbi bonds, also known as dim sum bonds, in Hong Kong, with Linklaters, King & Wood Mallesons, Conyers, Clifford Chance and Commerce & Finance Law Offices advising on the transaction.
The deal set records for the largest single dim sum bond issuance by a central state-owned enterprise and the highest subscription multiple for such bonds.
State Grid issued the bonds through its British Virgin Islands-incorporated subsidiary, State Grid Overseas Investment (BVI). The offering comprised three tranches: RMB3.9 billion of five-year bonds, RMB7 billion of 10-year bonds and RMB4 billion of 20-year bonds, with coupon rates of 1.86%, 2.18% and 2.46%, respectively.
The three tranches were listed on the HKEX on 21 August. The offering was more than 13 times subscribed overall.
State Grid acted as guarantor for the issuance. The Bank of New York Mellon acted as trustee, as well as registrar and transfer agent. ICBC, Bank of China, CITIC Securities, Agricultural Bank of China and Bank of Communications acted as joint global co-ordinators.
On the issuer and guarantor side, King & Wood provided PRC legal advice, with partner Song Yanyan leading the team. Linklaters acted as English and Hong Kong law counsel, led by capital markets partners William Liu, Lipton Li and Fang Min. Conyers provided British Virgin Islands legal advice.
On the underwriter side, Commerce & Finance provided PRC legal advice, with partner Pan Xinggao leading the team. Clifford Chance acted on English and Hong Kong law for the underwriters, and advised the trustee and agents, with the team including partners Fang Liu and Angela Chan.
Xinhua, China’s official news agency, said the first group of Chinese mainland insurance asset managers admitted to Southbound Bond Connect “fully participated” in the subscription, making the bonds the first outbound investment by insurance funds under this scheme.
Southbound Bond Connect allows investors in the Chinese mainland to access Hong Kong’s bond market. In June, the scheme was expanded for the first time to include six insurance institutions.
