In September 2016, advised by King & Wood Mallesons (KWM), China Cinda Asset Management Co., Ltd. (China Cinda) launched its non-public issuance of U.S.$3.2 billion 4.45% Non-Cumulative Perpetual Offshore Preference Shares at par value of RMB100 per share (issued in US dollars). This project was the first offshore preference shares issued by a domestic non-banking financial institution, with the lowest coupon rate offered by a Chinese financial institution in an offshore preference shares issuance up to now. It offered the lowest coupon rate and yield compared with other same level tier 1 dollar-denominated capital instruments, setting a new historical record in the international capital markets. It was the biggest issuance of other tier 1 capital instruments around the globe year to date.
China Cinda was the first financial asset management company approved by the State Council with the aim of defusing financial risks effectively and promoting the reform of state-owned banks and enterprises. It was the first Chinese asset management company landing the global capital markets. The transaction attracted extensive attention of the market, with Merrill Lynch International, Cinda International Securities Limited, BOCI Asia Limited, Goldman Sachs (Asia) L.L.C., The Hong Kong and Shanghai Banking Corporation Limited and Credit Suisse (Hong Kong) Limited acting as joint global coordinators, who, along with other 17 international well-known underwriters, formed an underwriting syndicate for the project.
KWM acted as the PRC legal counsel for the issuer. Leveraging the extensive project experience in preference shares, KWM team assisted China Cinda in liaising with relevant government authorities. The team pioneered in conversion trigger events and disclosure of capital adequacy ratios, providing good reference for other financial asset management company either in issuing preference shares or other tier 1 capital instruments. The project was led by partners Su Zheng and Yang Xiaolei, and the kernel partner was Zhou Ning.