- May 06, 2015
- With Support by CDB Capital on the Company’s Project Pipeline CNTD issues RMB1.3billion guarantee notes
(Hong Kong and Singapore, 29 April 2015) ― China New Town Development Company Limited – the future blueprint planner and leading developer of integrated new towns in China (the “Company”, “CNTD”, the “Group”; HKSE: 1278.HK; SGX: D4N.SI, its ultimate controlling entity is China Development Bank Capital Corporation Ltd. (“CDB Capital”), is pleased to announce that the Company has completed an issuance of guarantee notes, at an offering size RMB1.3billion. The transaction represents one of the largest offering of RMB bonds in Hong Kong this year. The guarantee notes with its maturity 3 years bear interest at the rate of 5.5%.
The issuance of guarantee notes was completed on 28 April. At the initial interest rate of 5.8%, the offer attracted profound support by a cornerstone investor within half an hour since its launch. It saw multiple times of over-subscription. With applications for subscription from plentiful renounced bond investors, the interest rate of the guarantee notes was determined at 5.5% at a principal amount of RMB1.3 billion.
CNTD is one of the earliest enterprises to have participated in the business of the township development. With 12-year experience in development and operation of new towns, the Group’s operations cover the entire industry chain. Both of its development projects and the management teams enjoy the leading positions in the industry. Since having become a member of the CDB Capital on 28 March 2014, the Company receives vigorous support by the controlling shareholder in different aspects such as business development and financing. Speaking of the support by CDB Capital, the issuance of the guarantee notes is no exception. CDB Capital profoundly enhanced the Company’s credit via a keepwell and liquidity support deed and a subscription agreement thus capturing the attention among the investors at the Company. Moreover, this is the first time that CDB Capital being the guarantor of its subsidiaries on their bond offering. The transaction reflects that CDB Capital attaches great deal of importance to the Company.
Established in 2009, CBD Capital is a wholly-owned subsidiary of China Development Bank (“CDB”), one of the largest policy banks and the only licence holder of Renminbi direct investment in China. CDB Capital has become one of the largest Renminbi investment institutes nationwide within the 6 years since its establishment. Adhering to CDB’s principal in supporting China’s urbanization process via financing, CDB Capital has regarded new model urbanization as one of its core business modules, and fully leverages the synergy between CDB and itself to facilitate the development of new model urbanization. Since 2008, CDB Capital has accumulated experience in the new model urbanization related investment and has successfully stretched its presence nationwide, providing financing support to the constructions of new model urbanization.
CDB Capital intends to take its new town development business into the next level. It does not limit itself merely in investment but look forward to tapping into the development and operation of the new town projects via its professional subsidiaries. CDB Capital completed its subscription of 54.3% enlarged shares of the Company and incorporated its resources and operational rationale into the Company. CDB Capital intends to turn the Group into the leading developer and operator of new towns and establish operational platform and offshore financing platform with a view to facilitating the business development of the Company.
The spokesman of CNTD comments, “The issuance of the guarantee notes is a significant breakthrough on the Company’s offshore financing exercises. It does not only optimize the Compnay’s financing costs, but also establishes the goodwill of the Company as well as CDB Capital in the offshore capital markets. Moreover, the transaction fully reflects CDB Capital’s vigorous foundation and its support to the Company’s development. The purpose of this financing exercise is primarily for the Company’s business development and is believed to be favourable to the expansion of the Company’s project pipeline. An enriching project portfolio hence will constitute a more attractive and stable business model.”
“Save from the issuance of the guarantee notes, CDB Capital had also offered unconditional guarantee on a bank loan for the Company, opening another onshore financing channel to the Company. Looking ahead, with the comprehensive support of the controlling shareholder, the Company is confident in continuously optimizing its financing structure, enhancing the financing efficiency, and leverages the capital to facilitate its project pipeline, so as to expand the Company’s assets that create better returns of the shareholders.”