In November 2019, CNI Capital Limited., an overseas wholly-owned subsidiary of China National Nuclear Corporation (the "CNNC"), issued offshore RMB bonds worth RMB1 billion in Hong Kong with a coupon rate of 3.97% (the "Issuance"). CNNC provided credit enhancement for this non-rating Issuance in the form of a keepwell deed.
CNNC is an important state-owned enterprise established with the approval of the State Council and directly administered by the central government. Composed of more than 200 enterprises, public institutions and research institutes, CNNC is the main player in Chinese nuclear technology industry and the backbone of China's nuclear energy development and the application of nuclear technology. CNNC plays an irreplaceable role in promoting the transition of low-carbon energy, ensuring energy security, establishing a modern energy system, and so on.
The Issuance was keenly sought after by well-known investors within China and abroad, including nearly 40 institutional investors such as HSBC Global Asset Management, Schroders Fund，E Fund, and so forth. The bonds were nearly three times oversubscribed. The final interest rate was set at 3.97%, 38 basis points less than the initial price guidance of 4.35%, creating the highest narrowing rate in Hong Kong's RMB bond market this year. It shows recognition of CNNC's leading status in the industry and excellent credit from the overseas capital market.
As the Chinese legal counsel for the Issuance, the DeHeng team, led by Mr. Hou Zhiwei, the partner of its Beijing Office, with primary support from Zhang Yan, Hu Xueyuan, Yang Jingjing, Xianyu Jiashan, Sun Yuehao，and Wang Zhi, provided professional, comprehensive and high-quality legal services for the Issuance.