Baker McKenzie, FenXun Partners, King & Wood Mallesons, Linklaters and Haiwen & Partners have assisted China Pacific Insurance (CPIC) in completing the issuance of HKD15.56 billion (USD2 billion) in zero-coupon convertible bonds, which will mature in 2030.
Not only is this the largest zero-coupon Hong Kong dollar-denominated convertible bond issuance in history, but it has set other records. It is the largest overseas secondary fundraising project in the Asia-Pacific financial institution sector and the first negative-yield Hong Kong-dollar convertible bond in nearly 20 years.
Baker McKenzie and its Chinese joint operation partner FenXun counselled CPIC on Hong Kong and English law. Baker McKenzie’s chief representative in Beijing, Wang Hang, led the team, which consisted of core members such as special counsel Bonnie Lau and FenXun’s senior counsel Rachel Wang.
King & Wood Mallesons advised CPIC on PRC law, led by partners Liu Dongya and Su Zheng.
Joint managers such as JP Morgan, UBS and Huatai International were counselled by Linklaters’ lead partners John Xu and Ki Taiki on Hong Kong and English law, and advised by Haiwen partner Hu Ji on PRC law.
CPIC said this H-share convertible bond issuance would enhance its ability to respond to business cycles and boost its capital supply. The funds raised will mainly be used to develop its insurance, healthcare and elderly care businesses, and advance its global strategy.
Since January this year, Chinese listed companies such as Ping An, Alibaba and Baidu have successively issued zero-coupon convertible bonds overseas. With expectations of interest rates declining, this type of bond has become an important option for companies to optimise financing costs.
