2025.01.14
In December 2024, Yinchuan Tonglian Capital Investment and Operation Group Co., Ltd. ("Yinchuan Tonglian") held a bondholders' meeting (the "Meeting") in Hong Kong. Yinchuan Tonglian was granted approval for flexible early redemption rights for all of its existing China (Shanghai) Pilot Free Trade Zone offshore bonds ("FTZ Bonds"). These bonds were issued in June 2023 with an issuance amount of RMB 2.12 billion and are set to mature in 2026. The bonds were issued within the Free Trade Zone and registered with the China Central Depository & Clearing Co., Ltd. ("CCDC"). Guaranteed by an irrevocable standby letter of credit from the Ningxia Branch of the Postal Savings Bank of China, the bonds were listed on the Chongwa (Macao) Financial Asset Exchange. According to the resolution adopted at the Meeting, Yinchuan Tonglian exercised the early redemption rights and completed the full early redemption of these bonds in January 2025. This transaction has significant implications for optimizing regional debt structures, preventing financial risks, and promoting stable economic and social development.
Yinchuan Tonglian's business includes infrastructure construction and operation, state-owned resource investment, industrial development, public services, and new energy investment. Under the leadership of the Yinchuan Municipal Party Committee and Government and with the guidance and assistance of the Municipal State-owned Assets Supervision and Administration Commission, Yinchuan Tonglian has become a profitable financial quasi-SOE with high financing amounts and diverse investments across multiple industries.
The JunHe team acted as the international legal counsel to the underwriter and the international legal counsel to the trustee. As the international legal counsel to the underwriter, JunHe’s team drafted the full set of transaction documents, participated in the negotiation and modification of the transaction documents, chaired the bondholders' meeting, and advised on issues related to UK law. As the international legal counsel to the trustee, JunHe’s team assisted the trustee in reviewing the full set of the transaction documents, participated in the negotiation of the transaction documents, reviewed legal opinions, and advised on the legal issues for this project.
This was the first nationwide redemption of FTZ Bonds exceeding RMB 2 billion, making it the largest ever FTZ bond redemption. The project has mitigated debt risks, maintained financial stability, and sent a signal to the market that Yinchuan City is actively addressing debt issues and optimizing the financial environment. It demonstrates Yinchuan City's determination to provide a favorable market environment for the future financing activities of local enterprises and highlights the strong economic development of the area. The project has significantly improved Yinchuan City's credit environment, enhanced market confidence, and created a healthy financial ecological environment for the city's subsequent economic development. This was also the first time that the terms of FTZ Bonds were modified through a bondholders' meeting and realize full redemption, marking an important milestone. The JunHe team assisted Yinchuan Tonglian, the consent solicitation agent, CCDC, the trustee and others in resolving the various technical issues, and they procured the approval of the early redemption proposal at the bondholders' meeting, setting many precedents.
JunHe’s team acting as the international legal counsel to the underwriter was led by partner Chris Tang. Lee, Alex Jao Jang led the JunHe team acting as the international legal counsel to the trustee.
