30 January, 2018
Pursuant to the approvals by the China Banking and Regulatory Commission (CBRC) and the China Securites Regulatory Commission (CSRC), China Merchants Bank Co., Ltd. (CMB) successfully completed the non-public issuance of domestic preference shares in 2017, through which an aggregate of 275 million shares of domestic preference stocks were issued at RMB 100 per share, with the dividend rate of 4.81% for the first five years following the issuance.
The total proceeds from the issuance of RMB 27.5 billion have been received. The domestic preference shares so issued were registered with, and placed under custody of, China Securities Depository and Clearing Co., Ltd, Shanghai Branch on December 22, 2017, and pursuant to the approval by Shanghai Stock Exchange on January 8, 2018, were available for transfer on the designated trading platform of Shanghai Stock Exchange as of January 12, 2018.
Previously on October 25, 2017, China Merchants Bank successfully completed the non-public issuance of offshore preference shares of 2017, through which an aggregate of 50 million shares were issued at USD 20 per share, with the dividend rate of 4.40% for the first five years following the issuance, and the total proceeds from the issuance of USD 1 billion were received.
On December 26, 2017, the offshore preference shares so issued were listed on the Stock Exchange of Hong Kong Limited.
This issuance of domestic and offshore preference shares is another significant financing transaction entered into by China Merchants Bank at both onshore and offshore markets since 2013 for the completion of the A Share Rights Issue and the H Share Rights Issue.
This issuance captured great attention from capital markets around the world and was subscribed to enthusiastically by the investors.
The ultimate offering interest rate applicable to domestic preference shares is equal to the average yield of the five-year PRC treasury bonds, which is the prime pricing among the domestic preference shares issued by comparable commercial banks in 2017.
The issuance of offshore preference shares was oversubscribed about three times, and the dividend rate finally determined is the lowest for the issue of offshore preference shares of PRC financial institutions to date, creating a new benchmark for Asian capital markets.
This issuance of domestic and offshore preference shares will further facilitate the consolidation of capital strength and the optimization of capital structure by China Merchants Bank, and will further improve its international competitiveness.
Since 2002 when representing China Merchants Bank in its A-Share IPO, JunHe has, acting as external legal counsel, advised and assisted China Merchants Bank in the completion of this issuance of domestic and offshore preference shares and other material financing projects carried out by China Merchants Bank in capital markets.
In this project, JunHe team was led by Partners LIU, Yongzhao, SUN, Xiaojia and WEI, Wei.
