2023.11.03
Acting as the international legal counsel and listing agent of Fujian Zhanglong Group Co., Ltd. (“Fujian Zhanglong Group”), JunHe assisted the client in its offshore issuance of senior unsecured blue bonds. USD 500 million bonds were issued, making this the largest single issuance of offshore USD bonds by a local state-owned enterprise (SOE) since the beginning of 2023. On November 3, 2023, the bonds were listed on the Hong Kong Stock Exchange. It is the first offshore blue bond issued by a non-financial local SOE in China as well as the first offshore USD bond to be cleared through the Central Moneymarkets Unit (CMU) in Fujian Province.
Established in 2001, Fujian Zhanglong Group is engaged in trading, water business, infrastructure construction and operation and other businesses. Fitch Ratings has affirmed Fujian Zhanglong Group’s long-term foreign- and local-currency issuer default ratings at ‘BBB- ’ with a stable outlook. Lianhe Global has assigned it a ‘BBB+’ issuer default rating with a stable outlook. Fitch Ratings has affirmed the debt rating of the USD 500 million bonds at ‘BBB-’, and Lianhe Global has assigned a ‘BBB+’ global scale long-term issuance credit rating to such bonds.
The offshore bonds were issued as blue bonds under Fujian Zhanglong Group’s Green and Blue Finance Framework. As the first Chinese non-financial local SOE to issue offshore blue bonds in the international capital market, Fujian Zhanglong Group has highlighted Fujian Province as a strong maritime province and Zhangzhou City as a city committed to the sustainable development of the marine economy. In 2022, Fujian Zhanglong Group issued the first ever investment-grade offshore green bonds in Fujian Province. The bond issuance in 2023 has further demonstrated Fujian Zhanglong Group’s commitment to sustainable development and the protection of the marine ecosystem in Zhangzhou City. By incorporating water resources and environmental protection into its finance framework, Fujian Zhanglong Group has further advanced environmental protection and high-quality development. In respect of the issuance of offshore blue bonds, Fujian Zhanglong Group engaged Sustainable Fitch and Lianhe Green Development to assess its Green and Blue Finance Framework. The two institutions issued second party opinions (SPOs), holding that the current framework was in line with international standards and China’s sustainable finance standards. The report demonstrates both domestic and international ESG assessment institutions’ high recognition of the green, blue and sustainable nature of the Group’s finance framework.
JunHe’s team acted as the international legal counsel to the issuer and provided whole-process legal services for the project, including drafting the offering circular, participating in the negotiation and amendment of the transaction documents, arranging for the closing, and advising on legal issues related to British laws involved in the project. JunHe’s team also acted as the listing agent for the bonds and provided services to the issuer in relation to the listing of the bonds on the Hong Kong Stock Exchange.
The JunHe team was led by partner Chris Tang.
