Company News - 27 February 2017

AMTD completes US$700mm 3yr bond offering for Xinhu Zhongbao

On 22 February 2017, Xinhu Zhongbao Co., Ltd. (600208.CH, “Xinhu Zhongbao” or the “Company”) successfully priced a debut Regulation S US$700mm 3-year senior bond offering (the “Transaction”), with AMTD acting as the Joint Bookrunner and Joint Lead Manager. Issuer of the Transaction is Xinhu (BVI) Holding Co., Ltd., a wholly owned SPV, with the Company providing offshore guarantee, and the bonds will be listed on the Hong Kong Stock Exchange. Xinhu Zhongbao is rated B2 Stable/B Stable/B Stable (Moody’s/S&P/Fitch), while the issue ratings are B3/B-/B (Moody’s/S&P/Fitch). The Transaction marks as the debut issuance by the Company in the international market, it is also the largest debut high-yield property issuance in the last 5 years and the largest Chinese high yield issuance in the past 12 months. Through this highly successful Transaction, the Company achieved an important milestone by broadening its investor base through offshore financing channels and established its brand name in the international capital markets.

The Transaction represents the 11th offshore fundraising transaction in the property sector completed by AMTD over the past 12 months, and the 5th transaction in the same space this year. Following Ronshine China (3301.HK) and Jiayuan International (2768.HK) debut issuances last year, AMTD has once again assisted a well-known property developer, Xinhu Zhongbao to tap the international bond market, demonstrating AMTD’s leadership and influences in high-yield property bond market. Prior to the aforementioned transactions, AMTD has also assisted in a number of onshore and offshore developers’ overseas financing transactions, which include various Chinese leading property developers, namely Yuzhou Properties (1628.HK), Guangzhou R&F Properties (2777.HK), China Aoyuan Property Group (3883.HK) and Carnival Group (996.HK); as well as Regal Hotels (78.HK), one of the largest hotel operators in Hong Kong; Emperor International Holdings Limited (163.HK), a famous Hong Kong-listed real estate company; Far East Consortium International Limited (35.HK), a diversified Hong Kong-listed property operator and developer founded by renowned businessman Mr. Deacon Chiu.

Benefitted from the Company’s prescient foresights to diversify its business into the financial and technology sectors from its main focus on property development, its accurate market positioning as well as its well-established brand name, and on the back of precise market timing and strong distribution capabilities of AMTD and other syndicate banks, the Transaction drew overwhelming demand from international and Chinese institutional investors across Asia and Europe. The orderbook was around 8x oversubscribed with over USD$5bn orders, reflecting investors’ confidence in Xinhu Zhongbao’s future prospects. The final coupon rate was set at 6% with the reoffer yield at 6.15% (reoffer price at 99.595), significantly tightened from the initial pricing guidance of 6.5% area.

AMTD acted as the Joint Bookrunner and Joint Lead Manager in the Transaction and assisted the Company to tap the dollar bond market. In particular, AMTD contributed one of the largest cornerstone orders, leading to the successful outcome of the Transaction. Other syndicate banks in the deal include UBS, China CITIC Bank International, BOC International, China Everbright Bank Hong Kong Branch, China Silk Road International Capital, CITIC CLSA Securities, Haitong International, Shenwan Hongyuan Securities (H.K.) and Zhongtai International.

The Transaction represents the sixth bond offering successfully completed by AMTD in less than 2 months since the beginning of 2017. In the past 12 months, AMTD has completed 26 bond transactions for various companies, serving leading Chinese and Hong Kong property developers; large enterprises namely China Huarong Asset Management (2799.HK), one of China's four leading financial asset management companies, China Minsheng Investment Group, the largest privately-owned investment company in China, Yunnan Provincial Investment, the largest comprehensive holding company in the Yunnan Province; onshore and offshore financial institutions such as Sirius International Insurance Group, a world-renowned insurance and reinsurance group and Zhongrong International Trust, one of the largest trust companies in China.

About Xinhu Zhongbao

Xinhu Zhongbao (600208.CH) was listed on the Shanghai Stock Exchange since 1999. The Company mainly engages in property development business and has a diversified portfolio of financial investments. Through years of cultivation, the company’s investments in the financial industry comprised of various financial institutions covering securities, bank, insurance and futures, among others. In addition, the scale and strength of the Company’s property development business is in the forefront of the industry. Xinhu Zhongbao believes in "the value of real estate". It grasps the overall macro and industry trends, captures opportunities rationally, positions its products appropriately and consistently improves its product quality, which collectively contribute to the brand reputation of "Xinhu Zhongbao real estate". The company has won a series of honourable titles including "China's most valuable listed real estate enterprise" and "China's most influential real estate enterprise in the past two decades".

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