Zhongcheng Qingtai Helps Jinan Urban Construction Group to Successfully Issue the First Offshore RMB Bond of Free Trade Zone Outside Shandong Province and Yangtze River Delta Region
Published:
2022-04-19
On April 13, 2022, Jinan City Construction Group Co., Ltd. (hereinafter referred to as "Jinan City Construction Group") successfully issued the first offshore RMB bond in Shanghai Free Trade Zone outside Shandong Province and Yangtze River Delta. The issuance scale is 0.6 billion yuan, the currency is offshore RMB (CNH), the coupon is 3.6, and the term is 3 years (G22 Economic Construction 01), the Central Government Bond Registration and Settlement Co., Ltd. provides issuance, registration, custody, settlement and other services. On April 19, to overcome the many difficulties of financial institutions in the Shanghai Free Trade Zone during the epidemic in terms of system control and transaction settlement, the issuance finally completed the delivery work, marking the free trade zone bonds from the "Yangtze River Delta" to the whole country, entering a new stage of development. Zhongcheng Qingtai Law Firm serves as the Chinese legal adviser of the bond issuer in this free trade zone, with lawyer Yao Huming as the project leader, and lawyers Su Na and Liu Rongyi to form a service team, together with Minmetals Securities, West China Securities, Bank of Communications, Shanghai Pudong Development Bank, Beijing Deheng Law Firm (underwriter China consultant), Tianjian Club, Zhongtian Yun Club and overseas lawyer teams Fangda Hong Kong Law Firm, Nianlida Law Firm, etc, work together to assist Jinan City Construction Group to complete the FTA bond issue. The main innovation of FTZ bonds is that they use the unique "sub-accounting unit" (FTU) and "branch accounting account" (FTA) of Shanghai FTZ to raise and transfer funds, and realize the orderly and safe flow of offshore RMB abroad, within and outside the region under the principle of "first-line liberalization and second-line control. As a result, in addition to enterprises in the free trade zone, enterprises outside the zone can also issue bonds through the FT account and custody and settlement services of China Bond Deng, and domestic and overseas qualified institutional investors can subscribe at the same time, improving financing flexibility and broadening financing channels. The competent authority for FTZ bonds is the National Development and Reform Commission, which is regarded as foreign debt supervision. Issuance to foreign investors requires foreign debt registration. The bond terms, issuance circulars and other transaction documents are consistent with the overseas debt projects of Chinese-funded enterprises in terms of language, format and framework. All these have laid the foundation for the international recognition of FTZ bonds and laid the foundation for the development of the overseas debt market in Shanghai FTZ. However, in terms of regulatory requirements, application of law, jurisdiction over disputes, debt service, and tax arrangements for issuers and domestic and foreign investors, FTZ bonds are still different from foreign bonds, and special attention should be paid to document writing and information disclosure to avoid risks arising from copying foreign bonds. Therefore, business lawyers not only need to be familiar with the requirements, procedures, and documents of overseas bond issuance, but also have a deep understanding of Chinese law and the special system of the free trade zone, and be able to communicate smoothly with the regulatory authorities. Big challenge. At present, the bond business in the free trade zone is still in the early pilot stage, and there are no clear market and regulatory laws and regulations and complete supporting systems. In the process of undertaking business, lawyers of Zhongcheng Qingtai have benefited from the guidance of the competent authorities, the trust of the issuer and the help of domestic and foreign cooperative institutions. They have systematically sorted out the Chinese law issues related to the issuance of bonds in the free trade zone, and have accumulated valuable experience for future business undertakings. I would like to express my heartfelt thanks and look forward to more opportunities to discuss and cooperate with more enterprises and industry colleagues in the future, jointly contribute to the internationalization of the RMB and China's bond market. Up to now, Zhongcheng Qingtai has assisted in the successful issuance of 9 overseas US dollar bonds of Chinese enterprises, with a total amount of more than US $3 billion. One dim sum bond (Hong Kong offshore RMB bond) with an amount of 1.5 billion RMB; Another four overseas US dollar bonds are being processed. The structure of the overseas debt issuance undertaken covers the modes of domestic parent company guarantee/maintenance of overseas subsidiary issuance and direct issuance of domestic entity's certificate. Zhongcheng Qingtai's performance in undertaking domestic corporate bonds includes: public issuance of corporate bonds, non-public issuance of corporate bonds, CMBS asset securitization business, ABS asset securitization business, targeted debt financing instruments, Beijin debt financing plan, ultra-short-term financing bonds, medium-term notes, REITs real estate trust investment fund business, ABN asset-backed notes and other businesses. Zhongcheng Qingtai has accumulated rich experience in domestic and foreign bond issuance, and can provide integrated legal services for clients' domestic and foreign bond financing.
On April 13, 2022, Jinan City Construction Group Co., Ltd. (hereinafter referred to as "Jinan City Construction Group") successfully issued the first offshore RMB bond in Shanghai Free Trade Zone outside Shandong Province and Yangtze River Delta. The issuance scale is 0.6 billion yuan, the currency is offshore RMB (CNH), the coupon is 3.6, and the term is 3 years (G22 Economic Construction 01), the Central Government Bond Registration and Settlement Co., Ltd. provides issuance, registration, custody, settlement and other services. On April 19, to overcome the many difficulties of financial institutions in the Shanghai Free Trade Zone during the epidemic in terms of system control and transaction settlement, the issuance finally completed the delivery work, marking the free trade zone bonds from the "Yangtze River Delta" to the whole country, entering a new stage of development.
Zhongcheng Qingtai Law Firm serves as the Chinese legal adviser of the bond issuer in this free trade zone, with lawyer Yao Huming as the project leader, and lawyers Su Na and Liu Rongyi to form a service team, together with Minmetals Securities, West China Securities, Bank of Communications, Shanghai Pudong Development Bank, Beijing Deheng Law Firm (underwriter China consultant), Tianjian Club, Zhongtian Yun Club and overseas lawyer teams Fangda Hong Kong Law Firm, Nianlida Law Firm, etc, work together to assist Jinan City Construction Group to complete the FTA bond issue.
The main innovation of FTZ bonds is that they use the unique "sub-accounting unit" (FTU) and "branch accounting account" (FTA) of Shanghai FTZ to raise and transfer funds, and realize the orderly and safe flow of offshore RMB abroad, within and outside the region under the principle of "first-line liberalization and second-line control. As a result, in addition to enterprises in the free trade zone, enterprises outside the zone can also issue bonds through the FT account and custody and settlement services of China Bond Deng, and domestic and overseas qualified institutional investors can subscribe at the same time, improving financing flexibility and broadening financing channels. The competent authority for FTZ bonds is the National Development and Reform Commission, which is regarded as foreign debt supervision. Issuance to foreign investors requires foreign debt registration. The bond terms, issuance circulars and other transaction documents are consistent with the overseas debt projects of Chinese-funded enterprises in terms of language, format and framework. All these have laid the foundation for the international recognition of FTZ bonds and laid the foundation for the development of the overseas debt market in Shanghai FTZ. However, in terms of regulatory requirements, application of law, jurisdiction over disputes, debt service, and tax arrangements for issuers and domestic and foreign investors, FTZ bonds are still different from foreign bonds, and special attention should be paid to document writing and information disclosure to avoid risks arising from copying foreign bonds. Therefore, business lawyers not only need to be familiar with the requirements, procedures, and documents of overseas bond issuance, but also have a deep understanding of Chinese law and the special system of the free trade zone, and be able to communicate smoothly with the regulatory authorities. Big challenge.
At present, the bond business in the free trade zone is still in the early pilot stage, and there are no clear market and regulatory laws and regulations and complete supporting systems. In the process of undertaking business, lawyers of Zhongcheng Qingtai have benefited from the guidance of the competent authorities, the trust of the issuer and the help of domestic and foreign cooperative institutions. They have systematically sorted out the Chinese law issues related to the issuance of bonds in the free trade zone, and have accumulated valuable experience for future business undertakings. I would like to express my heartfelt thanks and look forward to more opportunities to discuss and cooperate with more enterprises and industry colleagues in the future, jointly contribute to the internationalization of the RMB and China's bond market.
Up to now, Zhongcheng Qingtai has assisted in the successful issuance of 9 overseas US dollar bonds of Chinese enterprises, with a total amount of more than US $3 billion. One dim sum bond (Hong Kong offshore RMB bond) with an amount of 1.5 billion RMB; Another four overseas US dollar bonds are being processed. The structure of the overseas debt issuance undertaken covers the modes of domestic parent company guarantee/maintenance of overseas subsidiary issuance and direct issuance of domestic entity's certificate. Zhongcheng Qingtai's performance in undertaking domestic corporate bonds includes: public issuance of corporate bonds, non-public issuance of corporate bonds, CMBS asset securitization business, ABS asset securitization business, targeted debt financing instruments, Beijin debt financing plan, ultra-short-term financing bonds, medium-term notes, REITs real estate trust investment fund business, ABN asset-backed notes and other businesses. Zhongcheng Qingtai has accumulated rich experience in domestic and foreign bond issuance, and can provide integrated legal services for clients' domestic and foreign bond financing.
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