SPIC Website: SEP Successfully Issues First US$500m Offshore Bonds

On August 3, 2015, SEP successfully issued US$500 million of highly-rated unsecured bonds in the international capital market. The bond, with coupon rate of 3.625% and maturity of 5 years, was granted the rating of Baa2, BBB and BBB+ by Moody’s, S&P and Fitch respectively, and finally obtained subscription amount of nearly US$2.64 billion from 193 worldwide accounts, oversubscribed 5.28 times. It only took 2 months from the start to finishing international credit ratings, overseas road show and officially issuing USD bonds.
 
Actively expanding overseas market, successfully obtaining BBB+ international rating
 
In recent years, SEP has positively responded to “One Belt and One Road” strategy, paid close attention to overseas energy resources and power station investment opportunities as well as power station service market, actively expanded overseas market and built overseas investment and financing platform. Currently, the company has set foot in East Africa, Central Asia, Southeast Asia and Europe etc., involved in power station investment, construction, operation, management and maintenance fields. Confronted with large financing needs for overseas project construction, SEP has been actively exploring international capital market to provide financial support for these overseas projects.
 
While “testing the water” in the international capital market, robust “body” as well as acute insight and long-term accumulation is necessary. In the last two years, SEP remained a steady 20% increase in asset scale, from 31.567 billion RMB in 2012 to 47.344 billion RMB in 2014, while its domestic credit rating remained AAA, with asset-liability ratio always below 70%.
Relatively high international credit rating is necessary for the company to build diversified offshore financing structure and keep introducing low-cost overseas funds in large scale. In June 2015, SEP was granted ratings of BBB+, BBB and Baa2 by Fitch, S&P and Moody’s respectively, reflecting highly recognition of the company’s solvency and credit level by international rating agencies.
 
Quickly grasping issuance opportunity, completing first offshore bond issuance with high efficiency
 
Combined with final international credit ratings, SEP conducted in-depth studies of issuing scheme and formed underwriting group after comparing a number of powerful underwriters in the global debt capital market such as BOC, HSBC, Deutsche Bank and Morgan Stanley. In order to ensure optimal issuance, SEP Chairman Wang Yundan and President Wang Huaiming led the overseas road show team by themselves, holding “face to face” road shows with over 100 international investors located in Hong Kong, Singapore and London, which attracted huge interest among global investors and thus laid a solid foundation for the company to choose a favorable issuance opportunity.
Facing strong fluctuation in the complicated domestic capital market recently, SEP seriously analyzed the pricing strategy and grasped a delicate issuance opportunity, and the company successfully issued the first US$500 million highly-rated unsecured bonds in the international capital market on August 3. The bond was delivered and settled on August 11, paying interest every half year, and would be publicly traded in the secondary market after listing in Hong Kong Stock Exchange.
SEP has achieved a remarkable success in the first US$500 million offshore bond issuance, which not only opened up the overseas financing channel, but also established a good image in the global capital market, marking a solid step forward of SEP to the international capital market.

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