CICC Assists COGO in Completing 3-year USD500 MN Senior Bond

CICC, acting as the Global Coordinator and Bookrunner, successfully assisted China Overseas Grand Oceans Group Limited (“the Company” or “COGO”) in issuing USD500 MN 3-year senior fixed-rate USD bonds at a coupon of 4.875% on May 24, 2018(“the issuance”). The Company has strong cash flow, smooth access to both onshore and offshore capital market, as well as low financing costs. The issuance is designed mainly to capture the best window at a lower price amid the upward trend of offshore market rate, and the proceeds will be used mainly to repay the USD400 MN overseas bonds due in January next year. As a milestone deal, the issuance, which represents the Company’s first show since 2014 in the overseas fixed income market, has attracted a large number of high-quality investors in a volatile market, reflecting high recognition on the Company’s credit profile.

The Company is affiliated to China State Construction Engineering Corporation (“CSCEC”), with 38.32% interest directly held by China Overseas Land & Investment Limited (“COLI”). It has a focus on mid-to-high-end real estate development in 20+ China's third-Tier cities, and owns a sizable, diversified and high-quality land bank across the country, consistently enjoys benefits from its strong shareholders’ support in terms of business sharing, brand profile, management team, and bank credit. The fully standardized model based on full value chain management provides high-quality products to customers, improving customers’ satisfaction and loyalty. In 2017, the contract sales reached HKD37.1 Bn with a CAGR of 37.0% for 2010-2017; the revenue registered HKD20.3 Bn with a CAGR of 28.5% for 2010-2017. As the end of 2017, the Company had a total cash balance of HKD23.70 Bn with a cash/short-term borrowings ratio of 4.8x, reflecting its strong cash reserve.

Amid the upward trend of USD bond rates and the high market volatility, the deal received overwhelming demands from investors because of the Company’s strong credit profile and the effective marketing activities. The book opened with an price guidance of T3+225bps, received orders of over USD600 MN within the 1st hour and over USD1 Bn within the 2nd hour, and hit USD1.7 Bn at the peak, leading to a 3.5x over-subscription. This issuance represents one of the most oversubscribed among recent deals.

CICC, as the Joint Global Coordinator, efficiently organized a number of high-quality investors conferences in Hong Kong, Singapore and other places, and assisted the Company to conduct in-depth and comprehensive communications with over 90 high-quality institutional investors from funds, insurers, banks, etc. As a result, CICC has brought a large number of high-quality cornerstone orders for the Company before the book opening, made a significant contribution in excellent pricing result. In addition, CICC was also responsible for engaging intermediaries, transaction documentation, settlement and closing, as well as coordinating with the other parties to complete all workflows under a tight timetable. The successful issuance reflects CICC’s in-depth coverage of the real estate industry and its outstanding sales force, further solidified CICC’s leading position in the overseas fixed income market.