Recently, National Association of Financial Market Institutional Investors issued the Notice on Acceptance of Registration to CSCEC Xinjiang Construction and Engineering (Group) Co., Ltd. to accept the company's issuance of long-term cum-rights medium-term notes of 800 million yuan, with a registration validity period of 2 years and offering period of 3+N years. The lead underwriters of this project are China Construction Bank and Agricultural Bank of China.<
The long-term cum-rights medium-term notes, also known as perpetual bonds, is a financing instrument "with no fixed term and with right of redemption by issuer", that is both debt and equity financing, issued by non-financial institutions (issuers) in the inter-bank market. For issuers, it can achieve purposes such as increasing the scale of net assets, improving financial statements, and satisfying specific regulatory requirements. For investors, it provides higher coupon interest, with the risks far lower than that of ordinary stock investment.
CSCEC Xinjiang Construction and Engineering, a controlled subsidiary of CSCEC, has undertaken many key projects and local landmark projects such as Xinjiang Great Hall of the People, the tallest building in Xinjiang Zhongtian Square, Xinjiang Stadium, and Xinjiang Museum. In response to the Belt and Road Initiative, the company has also undertaken major and extra-large engineering projects in Kazakhstan, Kyrgyzstan, Tajikistan, Pakistan, Mongolia and etc., including the Chinese Embassy in Kyrgyzstan, and the asphalt road from Ulaanbaatar to Mandal-Gobi.
The registration of this perpetual bond is a beneficial attempt by CSCEC Xinjiang Construction and Engineering to expand asset operations, broaden financing channels and optimize financing structure. It is also the first successful registration of perpetual bond by a construction enterprise in Xinjiang.
As the legal counsel for the project, DeHeng formed a team comprising attorneys Chen Juan, Liu Ying, Hu Mengting, Song Tao and Shen Guihong in the Urumqi office. The scope of services included legal due diligence of the issuer and its subsidiaries, design and analysis of the deal structure, drafting and modification of transaction documents and issuance of legal opinions.