Bonds Apr 20

Hubei securities firm starts 5-bn-yuan bond issue

First phase of Tianfeng Securities' $707m issue, which will help businesses hit by the epidemic, was launched on April 15

Hubei securities firm starts 5 bn yuan bond issue
A man, left, wearing a face mask buys meat from a vendor on the other side of a barricaded residential compound in Wuhan in China's central Hubei province on April 14, 2020. Photo: Noel Celis / AFP

(ATF) Tianfeng Securities (601162.SH) successfully completed an issue of corporate bonds last week under an anti-coronavirus banner (first phase) for professional investors.

The bonds are the 20 Tianfeng 01 – bond code: 163423. They have a term of three years, a full-time subscription multiple of 2.76, and successfully raised 1.5 billion yuan, with a coupon rate of 2.87%, and a marginal multiple of five times.

A spokesperson for Tianfeng Securities said: "As a legal financial institution in Hubei, we have always received care and support from the Provincial Party Committee and provincial government and the people of Hubei, and we have a deep gratitude for this land and people."

Facing the coronavirus, Tianfeng Securities has since the end of January supported the frontline of the epidemic, promoting funding for efforts to fight the epidemic in Hubei province, helping people in need, and caring for medical staff.

On April 9, the firm announced that it would set up a partnership with 5 billion yuan (US$707 million). The Hubei Provincial Anti-epidemic and Stable Development Fund has helped Hubei enterprises resume production and helped poverty-stricken areas and helped revive the provincial economy.

China Securities Regulatory Commission gave approval for Tianfeng Securities' new bonds on March 24 (2020 CSRC License No. 469) – to publicly issue corporate bonds with a total face value not exceeding 5 billion yuan. 

The bonds will be issued in instalments. The first issue was for 1.5 billion yuan and the remaining bonds will be issued within 24 months from the date of registration. 

Caijing Finance insiders said the issue was a success for the new "Securities Law", which helped to improve the basic system of China's capital market. It marked a new step in the legalization of China's capital market.

Implementation of the registration system for corporate bonds can, on the one hand, shorten the bond issuance cycle, while releasing the dividends of simplified administration and decentralization, and supporting the growth of the real economy. But it has also imposed hard requirements on issuers and intermediaries to strengthen the obligation of information disclosure and to supervise inspection responsibility, the insiders said.