Shangri-La Asia has issued its first panda bond, which is a first for a Hong Kong listed hospitality group.
The Rmb1 billion ($140 million) three-year note is jointly managed by Bank of China, China Merchants Securities and Mizuho Bank (China), according to a June 5 media release.
Shangri-La had set up a Rmb20 billion medium term notes (MTN) programme, and this Rmb1 billion issuance is the first tranche of that programme and was subscribed 4.09 times. The coupon rate is 2.5% after achieving a AAA-rating by China Lianhe Credit Rating on both Shangri-La and the Rmb1 billion issue. Proceeds raised from the issuance will be used for "general corporate purposes", the release said.
A panda bond is a Chinese Rmb denominated bond from an issuer outside of mainland China.
Shangri-La Asia is part of the Shangri-La Group and is headquartered in Hong Kong and has a regional headquarters in Singapore. It is listed on the Hong Kong Stock Exchange (HKEX) and the Singapore Exchange (SGX).
In the media release, Chua Chee Wui, Shangri-La’s chief financial officer and executive director, said: “The successful debut of our inaugural panda bond demonstrates investors’ confidence in Shangri-La. This further diversifies our funding sources and marks our first foray into the onshore Rmb capital markets, and also helps us manage our group’s foreign currency exposure and better match our assets geographical exposure.”
Zhu Lei, head of debt capital markets, investment banking department, Bank of China, said: “This is the first-ever panda bond issued by a Hong Kong listed hospitality group. This issuance was subscribed 4.09 times, which reflects Shangri-La’s strong creditworthiness, excellent financial and robust business fundamentals”.
Also in the release, Huo Da, board chairman, executive director and chief information officer of China Merchants Securities, added: “This is the first time we are working with Shangri-La on corporate debt issuance. This is the lowest coupon rate of panda MTN for an offshore non-state-owned entity.”
Kenya Yoshiura, president, vice chairman of Mizuho Bank (China), said: “We have been working with Shangri-La on various offshore transactions for some time now and happy to partake in our first mainland China on-shore hospitality transaction with Shangri-La.”
