CICC Assists Bocom Leasing to Issue USD 1.5bn Senior Bond

On January 15, 2019, CICC, acting as Joint Lead Manager and Joint Bookrunner, assisted Bank of Communications Financial Leasing Co., Ltd. (the “Company” or “Bocom Leasing”) to successfully complete its senior bond issuance as drawdown of the offshore MTN program; the USD 800mm 3-year senior fixed-rate USD note at a coupon of 4.000% and the USD 700mm 5-year senior fixed-rate USD bond at a coupon of 4.375% (“the issuance”). The issuance is the first large-scale offshore bond exceeding USD 1bn in 2019 issued by Chinese companies and also marks the 6th transaction that CICC assisted Bocom Leasing to complete in offshore debt capital market as leading underwriter. The Company gave great recognitions on the resulting funding cost and market influence of the deal.

Established in December 2007, Bocom Leasing is one of the first five bank-backed financial leasing enterprises set up under the approval of the CBRC. It is a wholly-owned subsidiary of Bank of Communications, registered in Shanghai with a registered capital of RMB8.5 Bn. Bocom Leasing remains committed to “becoming the most influential national financial leasing brand”. Based on the comprehensive operation of Bank of Communications, the Company developed its own professional business features with focus on five industries including aviation, shipping, public infrastructure, energy equipment and machinery equipment. It has secured a great number of high-quality clients in the fields such as, aviation, shipping, urban public transportation and water affairs and gas, infrastructure construction, coal, oil, power and engineering machinery, thus vigorously supporting the development of real economy and has become the largest leasing company in Shanghai in terms of asset size. Until the end of 20181H, aviation and shipping leasing segments contribute almost half of the net income. The Company’s aviation leasing business ranked Top 3 in domestic industry, serving 57 clients across 21 countries and regions. The Company ranked No.2 in shipping leasing business of container liners globally. Client base covers large SOEs and global leading shipping companies.

CICC’s outstanding execution abilities helped the Company to grasp the optimal issuance window launching the deal at start the year and to complete this large-scale transaction with favourable cost when the Fed’s rate hike turned into doves and the US Treasury yield fell sharply. CICC is the logistic bank who led the investor meeting arrangements in Asia and organized more than 50 conferences with high-quality investors in Beijing, Shanghai, Hong Kong and Singapore. The meetings covered a number of investors who subscribed the Company’s offshore debt at the first time and anchored significant contribution to the success of the issuance.

Amid the highly volatized market when multiple economies’ data announced below market expectation and the start of the voting period for Brexit also caused many uncertainties to the issuance, nevertheless, the deal was outstandingly priced based on high-quality investor communication and marketing strategy. The book hit USD 5.3bn at the peak, leading to a 3.5x over-subscription. Ensuring the total issuance size of USD 1.5bn, the final pricing narrowed 22.5bps for the 3-year tranche and 25bps for the 5-year tranche, lower than the secondary trading level of comparable bonds. The Company gave great recognitions on the resulting funding cost and market influence of the deal.

The issuance is the 6th transaction that CICC assisted Bocom Leasing to complete in offshore debt capital market as leading underwriter, with successful issuance of offshore debt in total size of USD 6.3bn from 2016. It represented not only the long-term excellent cooperation relationship between the Company and CICC, but also the client’s great satisfaction with CICC’s strength on offshore debt’s underwriting. This deal, once again, solidifies CICC’s leading status in the global fixed-income capital market.