01 October 2004 – LAWFUEL – Best law news, legal, attorney, law firm, legal research Herbert Smith closes duo of landmark international debt transactions for
Herbert Smith has recently advised Industrial and Commercial Bank of China
Asia (ICBC Asia) and Panva Gas Holdings Limited on two significant
transactions that mark a dramatic change in the international debt market
out of China.
ICBC Asia sought to raise US$300 million through a Singapore-listed bond
issue lead managed by Goldman Sachs, HSBC and JP Morgan. The issue was
oversubscribed to the tune of US$1.5 billion. This massive show of market
interest led ICBC Asia to increase the issue to US$400 million guaranteed
notes due 2009.
This transaction was unusual for a number of reasons, most notably in that
it is the first senior fixed-rate bond by a Hong Kong incorporated bank.
There is also renewed life in the high yield bond market. Panva Gas Holdings
Limited sought to raise US$150 million again through a Singapore-listed bond
issue jointly arranged by Morgan Stanley and Merrill Lynch. This issue was
also over-subscribed (to around US$1.5 billion) and as a result, Panva
increased the issue to US$200 million medium-term notes due 2011.
The growing use of non-investment grade bonds is a further sign of both the
increasing sophistication and confidence of Chinese borrowers.
Hong Kong-based partner Terence Grady who led on both these transactions
“These significant transactions confirm the Chinese market will continue to
act as an engine for both local and international growth. Coupled with the
forthcoming listings of a number of Chinese banks on international stock
markets, we are now witnessing the ‘internationalisation’ of the entire
China banking system.”
The team working on ICBC (Asia) deal also comprised Derek Leung, Dee Dee Man
and Margie China (banking) and partner Tommy Tong, Carolyn Sng and Michael
Ling (corporate). Allen & Overy advised the joint lead managers.
For the Panva Gas transaction, Terence was assisted by Kevin Roy, Margie
Chan and Anny Leung. The managers were advised by Freshfields.