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Chengtong Investment successfully issued $500 million overseas bonds

The Group’s Headquarters     2017-08-03         

On August 1, China Chengtong Investment Co., Ltd. (Chengtong Investment), a subsidiary of China Chengtong Group (the Group), successfully issued $500 million 5-year Reg S bonds, which is the Group’s first dollar-denominated foreign bonds and also makes the first appearance of state-owned capital operating company in the international capital market. The issuance expanded the Group's influence in the international capital market and attracted widespread attention of the international investors.

Chengtong Investment, established by the Group in Hong Kong, serves as the Group’s international investment entity and capital operation platform. Chengtong Investment’s issuance of foreign bonds could not be successful without the support from the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), the National Development and Reform Commission (NDRC) and other ministries and commissions. The funds raised will be used mainly for the central state-owned enterprises’ overseas structural adjustment, optimization of projects’ layout, and improving the internationalization standard, which marks the Group’s opening of a whole new way of international capital operation as the state-owned capital operating company.

The Group attaches great importance to this overseas bond issuance. In early June of this year, the Group’s President Zhu Bixin visited the UK and met with person in charge of Schroders Group, the Bank of New York Mellon Corporation, Equitile Fund, and other world-renowned investment institutions and introduced the function orientation, strategic direction and key development areas of the state-owned capital operating company to the international capital market. Zhu Bixin held in-depth communication with all parties whilst his stay in the UK and expanded the Group’s influence on the global market. After announcing the issuance of bonds on July 25, the issuing team organized formal roadshows in Hong Kong, Singapore and London. The Group’s Chief Accountant Xu Zhen joined the roadshow and introduced to the international investors about the Group’s development and the direction, mode of use and expected effect of the raised funds etc., which has been well received by investors. Within two hours of the issuance, orders exceeded two times of the volume of the issuance with the peak orders reaching $3.4 billion. The bonds were oversubscribed more than 6 times and successfully attracted nearly 100 international investors, including BlackRock, Muzinich, Schroders Group, Marathon Fund, HSBC Global Asset Management and other world-class investment entities.

The successful issuance of overseas bonds has created a number of eye-catching highlights: first, the timing of the issuance window is perfect. After a thorough study and analysis, the team has chosen the lowest point of the US Treasury yields in the last 1 month and secured the optimal cost pricing; second, international investors have laid great emphasis on the issuance. In the final issue of orders, 22% of which were purchased by well-known investors from Europe and the United States, which is higher than the proportion of European and American investors’ purchase in recent overseas bonds issuance; third, the proportion of Chengtong Fund and Chengtong Investment’s investment is more than 50%, which is different from the common issuing model by relying on bank credit; fourth, there is no rating for this issuance. As the parent company, the Group provides Keepwell Agreement and Share Repurchase Agreement, which is a good indication of the international capital market’s recognition of and faith in the prospect of China’s state-owned enterprises’ state-owned capital reform and state-owned capital operating company’s development.

 

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