Linklaters is pleased to have advised China Yangtze Power Company Limited on the concurrent issuance of US$300,000,000 Zero Coupon Exchangeable Bonds and EUR 200,000,000 Zero Coupon Exchangeable Bonds.

“The innovative deal structure opens the door to a whole new asset class, which allows China incorporated companies to monetise their holdings of H-shares at a premium,” said capital markets partner Hwang Hwa Sim.

Mr Sim said the transaction takes place as part of Chinese government policy to undertake the restructuring of state owned enterprises (SOE) and the disposal of non-core assets.

“The structure offers a highly advantageous method of disposal, because it allows SOEs to sell holdings of non-core listed equities at a very high premium. The transaction is a superb client outcome,” Mr Sim said.

The transaction includes the first dual currency exchangeable bond issuance in the international capital markets.

Mr Sim said the bonds, which are exchangeable into H-shares, are an innovative new asset class which has been developed by Linklaters.

“As part of the broader restructuring of the China State Owned Entities sector, we expect such issuances to become increasingly common as SOEs seek to monetise their assets,” Mr Sim said.

The Linklaters team was led by partner Hwang Hwa Sim with assistance from senior associate Lipton Li.