In November 2016, advised by King & Wood Mallesons (KWM), Huishang Bank Corporation Limited (Huishang Bank) issued US$888 million 5.50% non-cumulative perpetual offshore preference shares. This is the first successful overseas issuance of preference shares made by a Chinese city commercial bank, and the first overseas preference shares from a non-internationally-rated Chinese bank.

Huishang Bank is the first regional joint-stock commercial bank jointly set up by the reorganization and merger of city commercial banks and credit cooperatives approved by the China Banking Regulatory Commission. After deducting the relevant cost of issuance, the funds raised will be used to supplement the bank’s other Tier 1 capital. The transaction received extensive attention from the market. CCB International, Haitong International, UBS, Deutsche Bank, BOC International and HSBC acted as Joint Global Coordinators.

KWM acted as PRC counsel for the issuer. In advising on the first city commercial bank issuance of overseas preference shares, KWM leveraged its extensive experience in preference shares and assisted Huishang Bank in communicating with relevant regulatory authorities. The project serves as a useful reference for future overseas preference shares offerings by other city commercial banks. It was another success of cooperation between KWM and Huishang Bank, after KWM assisted the bank issuing H-shares and applying for an A-share IPO. The project was led by partners Su Zheng, Li Yuanyuan and Liu Dongya.

Su Zheng commented, “We’re pleased to have assisted Huishang Bank clinching another win in the capital market. Unlike other overseas preference shares offerings, the project created a precedent for city commercial banks, bearing witness to KWM’s innovation and rich experience in the capital market.”