Baker McKenzie advised China Railway Construction Corporation Limited (CRCC), one of the ultra-large integrated construction enterprises in the world, on its offering of USD 1 billion guaranteed perpetual securities that closed on 27 June 2019.
The transaction is CRCC’s latest fund-raising move in overseas markets and sets a benchmark for Chinese SOE perpetual bonds in the wake of new guidelines of the Ministry of Finance (MOF) on accounting treatment for corporate perps at the beginning of this year. The securities, issued by CRCC Chengan, CRCC’s Hong Kong SPV, and guaranteed by CRCC on a subordinated basis, are treated as “equity” at CRCC level. The deal was priced at an initial distribution rate of 3.97% per annum.
The Baker McKenzie team was led by Capital Markets partners Jackie Lo and Hang Wang in Beijing, with support from Xavier Amadei, local principal with Singapore member firm Baker McKenzie Wong & Leow, and counsel Bing Han with FenXun Partners in Beijing. The team was assisted by associates Rachel Wang in Hong Kong, Daisy Chen and Wanfei Hu in Shanghai, legal assistants Phoebe Wang in Shanghai and Ashley Meng in Beijing.
Commenting on the deal, Jackie Lo said: “We have been privileged to work with CRCC, our long-time client, on this significant transaction. This transaction plays to our strength in complex transactions and also our deep knowledge and experience in assisting industry conglomerates in cross-border fund-raising deals."
Hang Wang added: “This transaction was particularly challenging given the new guidelines from MOF. We are very pleased to have been able to draw on our expertise and work together with other deal teams to successfully bring this transaction to fruition for our client."