(Yicai) Aug. 17 -- The offshore financing arm of Chinese power generation and electrical equipment manufacturer Shanghai Electric Group has successfully issued the world’s first non-financial corporate free trade zone offshore bond in Hong Kong.

Shanghai Electric Global Capital issued a CNY1.5 billion (USD222.5 million) green FTZ offshore bond with a term of three years and a coupon rate of 1.8 percent on Aug. 12. The bond was listed on the Hong Kong Stock Exchange the following day.

The issuance received high attention and strong support from the People’s Bank of China Shanghai Head Office, the Financial Committee of the Shanghai Municipal Committee of the Communist Party of China, the Shanghai Development and Reform Commission, the Shanghai Municipal Finance Bureau, the Shanghai State-Owned Assets Supervision and Administration Commission, other competent government agencies, and China Central Depository and Clearing.

Guotai Junan International Holding was the ‌sole lead global coordinator and exclusive green structure consultant, with CCDC offering registration and custody services. Bank of China Hong Kong and BOC International Holdings served as global coordinators, while BOC Shanghai was the domestic coordinator.

Bank of Communication International Holdings served as the co-global coordinator, co-bookrunner, and co-lead underwriter, while BOCOM’s head was the joint domestic coordinator. BOCOM’s Macao, Singapore, and Luxembourg branches participated as overseas investors, while its Shanghai branch was the clearing bank selected by CCDC to provide clearing services.

During the issuance, Shanghai Electric conducted investor roadshows in Singapore and Hong Kong, receiving 71 investment institutions and over 140 investors, including asset managers, banking and insurance institutions, proprietary trading of securities firms, and long-term funds. The bid-to-cover ratio exceeded 12 times, and the interest rate dropped from the initial price guidance of 2.4 percent to 1.8 percent, indicating that domestic and foreign capital markets have recognized Shanghai Electric’s credit qualifications and investment value.

FTZ offshore bonds are issued to raise offshore funds under internationally acknowledged rules and standards from offshore and FTZ investors. The issuers are mainly offshore branches or subsidiaries of Chinese enterprises or offshore institutions, with domestic financial infrastructure providing registration and custody services.

FTZ offshore bonds are encouraged to be denominated in Chinese yuan, compatible with foreign currencies, and in line with international regulations. They are divided into two categories, depending on whether they are issued by financial institutions or enterprises.

China started piloting FTZ offshore bonds last year. Shanghai has supported 17 offshore entities to issue FTZ offshore bonds worth a total of CNY7.1 billion.

Editor: Futura Costaglione