Allen & Overy has advised Baosteel Group Corporation (Baosteel Group) as keepwell provider and Baosteel Hong Kong Investment Company Limited as issuer on the issue of USD500 million three-year zero-coupon bonds exchangeable into H-shares of China Construction Bank Corporation held by Baosteel Group.
 
The transaction marks the first exchangeable bond where a SOE utilises the H-Shares (shares of companies incorporated in mainland China that are listed on the Hong Kong Stock Exchange) it holds to support an offshore bond issuance and the first equity-linked deal with a credit enhancement feature.
 
The Allen & Overy team comprised partner Ji Zou in Shanghai and partner John Lee and consultant Agnes Tsang in Hong Kong.

Commenting on the deal, Agnes Tsang said: “This transaction signifies China’s on-going developments in the global capital markets seeing SOEs utilising H-shares it holds to support its offshore financing. We expect to see more similar issuances by SOEs.”

For further information, please contact Nadine Gibbon in Hong Kong, [email protected], +852 2974 7090.