Mayer Brown JSM and Conyers Dill & Pearman were among the firms that advised on the Tianjin government’s investment vehicle to raise yuan bonds abroad, as Beijing allows more PRC banks and state-owned enterprises to tap into the burgeoning offshore yuan market.
On November 10, Tsinlien Group Company, an investment holding arm of the Tianjin government operating in Hong Kong, issued 1.3 billion yuan of 5.75 percent guaranteed bonds due in 2014 via its wholly-owned unit Victor Soar. The bonds were listed at the Singapore Exchange Securities Trading Limited.
Mayer Brown and Conyers served as the Hong Kong and British Virgin Islands counsels respectively to the issuer.
The proceeds of the issue will be used by Tsinlien for general corporate purposes and to facilitate future acquisitions.
Mayer Brown’s team was led by corporate finance partners Ben Sandstad and Jeckle Chiu, while the Conyers team was headed by Hong Kong-based associate Anna Chong.
"It was especially pleasing to have completed this deal amid the challenging wider market environment. The issuance is further evidence that despite the volatility, demand for dim sum bonds remains resilient," said Sandstad.
Citic Bank International, DBS Bank, Deutsche Bank, JPMorgan, Standard Chartered Bank, UBS, Wing Lung Bank and Goldman Sachs International are joint bookrunners and joint lead managers for the transaction.
Jingtian & Gongcheng and Linklaters represented the joint lead managers and bookrunners and the trustee HSBC over PRC law and Hong Kong law respectively.
Previously, Mayer Brown advised long time client Tsinlien on its issuance of 1.6 billion U.S dollar-settled 1.25 percent guaranteed exchangeable bonds that will be due in 2016.
Known as one of the active dim sum bond advisors in town, Mayer Brown was engaged by Hong Kong-listed Beijing Enterprises Water Group in October for its secondary issuance of 1.45 billion yuan three-and five-year paper.
Tsinlien’s issuance came on the heels of other dim sum bonds rolled out by SOEs in recent months, which included China Merchant Holdings (Hong Kong)’s 3 billion yuan three- and five-year bonds priced 2 and 3 percent respectively; China Resources Power’s 2 billion yuan notes due in 2013 and 2015 and priced at 2.9 and 3.75 percent respectively.
With investors gradually realizing that yuan appreciation is not absolute and exercising more discretion on the many dim sums flooding the market, experts believe new yuan bonds will be priced higher in the coming months and investors will demand credit ratings on these papers. ALB
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