2021.11.19
On November 18, 2021, Far East Horizon Limited (Far East Horizon) successfully issued sustainability Panda Bonds on China's Interbank Bond Market. This marks the first sustainability bonds issued since the National Association of Financial Market Institutional Investors (NAFMII) announced the pilot program of social bonds and sustainability bonds on November 11, 2021. JunHe represented the joint lead underwriter Standard Chartered Bank (China) Limited (Standard Chartered) as PRC legal counsel in the project.
NAFMII released the Q&As on the Pilot Program of Social Bonds and Sustainability Bonds on November 11, 2021. The launch of the pilot program was in response to the Chinese Government’s initiative for the “high quality development” of the onshore bond market as well as the United Nations’ 2030 Agenda for Sustainable Development, which encouraged financial resources in bond markets to support sustainable development. According to the Q&As on the Pilot Program of Social Bonds and Sustainability Bonds, sustainability bonds refer to bonds issued by an issuer on China’s Interbank Bond Market with the proceeds to be exclusively applied to a combination of green and social projects. In line with international standards, green, social and sustainability bonds are commonly referred to as GSS bonds. In recent years, GSS bonds have grown rapidly around the world in response to environmental and social challenges. While the International Capital Market Association has established the principles and practices for social bonds and sustainability bonds, the issuance of social bonds and sustainability bonds has also taken off or accelerated in the EU, ASEAN and Japan’s markets. Large Chinese institutions have issued US dollar-denominated social bonds and sustainability bonds on the offshore markets. With the overwhelming recognition of sustainable development in China, there are practical needs for the development of GSS bonds. The launch of sustainability bonds in China implies an approach by financial markets to facilitate sustainable development goals.
Far East Horizon is a comprehensive group engaged in the provision of financial services. It was listed on the Hong Kong Stock Exchange in 2011 (stock code: 03360 HK). The company offers integrated financial services including financial leasing, inclusive finance, commercial factoring, asset operation, equity investment, construction project investment and overseas business in fields related to the national economy and people’s livelihood. This includes urban public utilities, healthcare, cultural tourism, engineering construction, mechanical manufacturing, chemical engineering and medicine, electronic information, civil consumption, transportation and logistics. It also specializes in the operation of hospitals, health and pensions, equipment operation and education. This is the first sustainability bond issued onshore under the NAFMII’s pilot program of social bonds and sustainability bonds. The proceeds raised from the bond issuance will be used to support green and social projects related to sewage treatment, ITS, NEVs procurement and healthcare and caring for the elderly. It will facilitate the accomplishment of the UN Sustainable Development Goals which include climate action, good health and well-being and clean water and sanitation.
Acting as the joint lead underwriter’s PRC legal counsel to Standard Chartered, JunHe provided high-quality, rigorous and efficient legal services to the client. This included conducting special due diligence on the issuer, reviewing underwriting agreements and transaction documents, as well as researching and answering the questions relating to the Q&As on Pilot Program of Social Bonds and Sustainability Bonds. JunHe’s hard-work, state-of-the-art legal expertise and successful results earned it the recognition and trust of the client.
Partners YU, Yongqiang (YY) and LEI, Tianxiao led the firm’s deal team with the support of Partner HUANG, Wei (internal control).
