CICC, acting as Global Coordinator, Lead Manager, Bookrunner and Rating Advisor, successfully assisted Hubei Science & Technology Investment Group Co., Ltd. (“HBS&TI” or the “Company”) in completing its debut offshore bond issuance of 3-year 4.375% coupon USD300 million Senior Guaranteed Notes on February 26, 2018 (the “Issuance”). This issue has successfully grasped the time window when the market calmed down from fluctuation, and attracted significant amount of high-quality investors based on good credit profile and efficient marketing. The Issuance allows the issuer to develop a new financing channel in the international capital market and realize favorable funding cost. 

Established in 2005, HBS&TI is the most important entity in the East Lake High-tech Zone in terms of infrastructure development and state-owned assets management. It focuses on the infrastructure construction, industrial investment, services to small-and-medium enterprises, and the operation and management of state-owned assets, providing comprehensive support for the economy development of Wuhan and the East Lake High-tech Zone. HBS&TI is the largest state-owned company in East Lake High-tech Zone, which has accumulatively participated in 37 park construction projects and made investments of RMB120 billion in the projects, including infrastructure projects like Hubei Science & Technology Museum, Optics Valley’s Tennis Sports Center, Optical Valley’s Biological City and Integrated Free Trade Zone, as well as industrial investment projects like Tianma Microelectronics Co., Ltd. and Wuhan China Star Optoelectronics Technology Co., Ltd.. HBS&TI is controlled by Wuhan East Lake High-tech Development Zone Administrative Committee.

CICC, acting as Rating Advisor responsible for Fitch rating, successfully assisted HBS&TI to achieve BBB + from Fitch with stable outlook. HBS&TI is the first state-owned company that obtained and published the excellent ratings from two international rating agencies. The rating result is also one of the highest international ratings among those of state-owned companies of high-tech zones in China, which demonstrated the strong credit profile of Wuhan, East Lake High-tech Zone and HBS&TI and laid a solid foundation for the successful issuance.

The roadshow of the issue has ensured efficient communication with targeted investors. During the roadshow in Hong Kong and Singapore, the Company had a deep communication with over 100 investors from global large institutions, which included sovereign funds, insurers, mutual funds, banks and private banks. During the roadshow, the US stock market slumped, VIX index surged and investor turned to be conservative. Considering situation, the syndicate suggested the Company delay the pricing and wait the market to stabilize based on the precise understanding and prediction to the market. In the meantime, CICC kept communicating with investors and assisted them to understand the credit highlights of HBS&TI, which helped lock high-quality cornerstone investors and reduced the negative effect of market.

The book opened with an initial price guidance of T3+230bps, and achieved a full coverage of expected issue size within half an hour. The book reached over USD1 billion as of 2pm, and the final book amounted over USD1.6 billion with a 5.3 over-subscription before final price guidance. On the back of strong investor demand, the final pricing tightened by 25 bps from the initial price guidance with orders from 90 accounts. The book quality is superior to those of comparable LGFVs, with 59% fund investors and 9% European investors. Influential institutional investors in the international market joined the issue and received allocation, reflecting market’s recognition to HBS&TI.

CICC, acted as the Global Coordinator, Lead Manager, Bookrunner and Rating Advisor of the transaction, efficiently completed execution process including international rating advisory, obtaining regulatory approval, due diligence, documentation, marketing and distribution, settlement and etc. The transaction further solidified the leading position of CICC in the international capital markets.