13 December, 2016
King & Wood Mallesons has advised the joint lead managers as their US counsel on the US$300 million 8.75% senior perpetual securities issuance with customary high yield covenants by China Grand Automotive Services Co. Ltd. through its subsidiary, Baoxin Auto Finance I Limited. The deal is the first high yield perpetual bond offering by a non-real estate PRC company to date.
In 2015, China Grand Auto was the largest passenger vehicle dealership group in China in terms of both revenue and sales volume of passenger vehicles, the number one passenger vehicle finance leasing provider in China in terms of leasing volume of passenger vehicles, and the largest used vehicle trading agent among vehicle dealers in China in terms of trading volume of used vehicles.
Commenting on the deal, Hong Kong-based partner Hao Zhou said, “We are very glad to have had the opportunity to advise our long-term investment banking clients in this unique and innovative transaction, which combines conventional perpetual features and US style high yield covenants, with further complexity involving pro forma financial disclosure due to a recent significant acquisition. Given our proven track record and strong execution skills, we are busy with a growing pipeline of debut high yield bond offerings by PRC issuers.”
KWM also has extensive experience in advising on offshore bond offerings by issuers in the PRC auto industry. Prior to this transaction, we advised the Beijing Automotive Industry Group on its debut euro bond issue; Weichai Power on its debut international bond issue; and more recently, Geely in the first green bond offering by a PRC auto manufacturer.
The KWM team was led by partner Hao Zhou, supported by senior associate Michael Lu.
