On April 17, 2018, Chongqing High-tech Zone Development and Investment Group (“Chongqing GKT”) issued its 2018 Phase I MTN (“ME&I MTN”) with CICC’s assistance. The offering size of the AAA-rating notes, in a registered amount of RMB2.0 billion, is RMB1.0 billion with a maturity of 5 years; the coupon rate is 5.3%, the lowest among all MTNs offered in West China over the same period. The proceeds will be used to improve the modern operation of Chongqing High-tech Industrial Development Zone (“Chongqing High-tech Zone”) and to provide equity investment and direct support for enterprises participating in mass entrepreneurial and innovative activities (“ME&I”) within the zone.

The deal represents the first public offering of bond financing instruments by an ME&I issuer in China. In the transaction, CICC and China Minsheng Bank acted as Lead Underwriter and Joint Lead Underwriter, respectively, and China Bond Insurance Company provided full-amount, irreversible joint liability guarantee for the deal. In addition to CICC’s proven innovation capabilities and efficiency in regulatory procedures, the deal witnessed its prominent marketing advantage which is based on full network coverage and multiple sales channels. With high marketing efficiency, CICC assisted the client in seizing the optimal market window and set a precise bookbuilding range, achieving 4x oversubscription and an ideal financing cost.

The offering, as an important bond financing deal under the theme of technological innovation, was jointly driven by PBoC Chongqing Operations Office, Management Committee of Chongqing High-tech Zone and Government of Jiulongpo District under the framework of Memorandum of Understanding on Boosting the Economic Development in Chongqing via the Interbank Market, which was entered into by NAFMII, Financial Office of Chongqing Municipal Government and PBoC Chongqing Operations Office (or, the “Three-party Cooperation” mechanism). The issuance, echoing the requirement of promoting the high-quality development of the real economy, is consistent with the innovation-driven development strategy while combining the municipality’s technological innovation reality. The deal’s success indicates a new channel for the bond market to facilitate the high-quality development of Chongqing’s real economy and a new step forward in furthering the advancement of the Three-party Cooperation mechanism as socialism with Chinese characteristics has entered a new era.

Chongqing High-tech Zone was established in March 1991 under the approval of the State Council. As one of the first 27 national high-tech industrial development zones, Chongqing High-tech Zone has been rated as National Advanced High-tech Zone, National Demonstration Zone of High-tech Industry Standardization, National Demonstration Park of Intellectual Property Rights, National Pilot Park for the Construction of Technological Innovation Service System, and First Pilot Technological Service Industry Zones in China. It is also a National Software Industry Base, National Biological Industry Base, High-tech Service Industry Base and Innovation Base for Technology-driven Trade Development. In 2016, Chongqing High-tech Zone was approved to establish a National Independent Innovation Demonstration Zone and listed into the China (Chongqing) Pilot Free Trade Zone initiative. Chongqing GKT as a key operator of Chongqing High-tech Zone is tasked with supporting ME&I enterprises in the incubation area while promoting the development and construction of the high-tech zone.