In November 2024, Wuxi Construction and Development Investment Co., Ltd. ("WCDI"), a non-financial enterprise, successfully issued the world's first ever Yulan bonds which were listed simultaneously on the Hong Kong, Macau, and Frankfurt Stock Exchanges. JunHe acted as the issuer's PRC legal counsel, its international legal counsel and its listing agent.
A total of RMB 2.142 billion 3-year senior unsecured sustainable bonds were issued at a fixed interest rate of 2.68%. The bonds were issued under Reg S and unconditionally guaranteed by WCDI. The final pricing significantly narrowed by 62bps from the initial price guidance, setting the lowest ever interest rate for an offshore RMB bond issuance by a local state-owned enterprise. The bonds were assigned a “BBB+” rating by Fitch and an “Ag+” rating by CCXAP.
These were the world's first sustainable Yulan bonds to be issued following the mainstream principles of the 2021 Sustainability Bond Guidelines of the International Capital Market Association (ICMA) and were externally certified. They were also the first Yulan bonds to be listed simultaneously on the Hong Kong Stock Exchange (HKEX), the Chongwa (Macao) Financial Asset Exchange Co., Ltd. (MOX), and the Frankfurt Stock Exchange (FWB), marking a significant breakthrough in sustainable finance and multi-listings. WCDI became the first state-owned enterprise in China to issue such bonds and the issuance is a milestone for innovation in overseas sustainable financial products.
WCDI was established in August 2005. It is a wholly state-owned enterprise and the Wuxi Municipal Commission of State-owned Assets Supervision and Administration and Wuxi Urban Construction Development Group Co., Ltd. holds 51% and 49% equity interest, respectively. The company has expanded its scale and business over the years, with a focus on industrial financial services, industrial investment attraction, industrial capital operations, and industrial park investment and operation. As a leading comprehensive service provider in Wuxi, WCDI leverages industrial and financial capital to conduct asset operations. The company has total assets of RMB 101.238 billion, with a "AAA" rating assigned by the domestic credit rating agency, a "BBB+" rating by Fitch and a "A+" rating by Lianhe Global and CCXAP.
The JunHe team acted as the issuer's PRC and UK legal counsel and listing agent. The legal services provided by the PRC legal counsel included conducting legal due diligence on WCDI and its domestic subsidiaries, issuing PRC legal opinions, reviewing and amending the transaction documents, and other legal services in respect to PRC law related issues. The legal services provided by the UK legal counsel included drafting the offering circular, participating in the negotiation and amendment of the transaction documents, making closing arrangements, and other legal services in respect to UK law related issues. As the listing agent for the bond issuance, JunHe’s team advised on the listing of the bonds on the HKEX, MOX and FWB.
This was another representative project in which JunHe’s domestic and overseas teams joined forces to provide one-stop legal services. The close cooperation between the firm’s domestic and overseas offices improved communications, saved time and reduced costs for the clients. JunHe was recognized and trusted by the company and the other intermediaries for its rigorous and efficient legal services and its detail-oriented and professional expertise.
Partner YU, Yongqiang (YY) led the JunHe team acting as the PRC legal counsel and partner SUN, Fengmin was responsible for the specific work. JunHe partner Chris Tang led the team acting as the UK legal counsel.