China Construction Bank Underwrites China’s First Real Estate Enterprise M&A Notes


China Construction Bank (CCB) has underwritten what is reportedly the first batch of medium-term debt instruments to be used to finance the merger and acquisition of companies in the country’s beleaguered real estate development sector.

On 26 January CCB led the issuance of the Zhangshangju Shekou Industrial Zone Share Controlled Co., Ltd 2022 First Round Medium-term Notes (Merger) (招商局蛇口工业区控股股份有限公司2022年度第一期中期票据(并购)) and the Jianfa Real Estate Group Co., Ltd. 2022 First Round Medium-term Notes (Merger) (发房地产集团有限公司2022年度第一期中期票据(并购)).

The Zhaoshang Shekou issue raised 1.29 billion yuan in funds, all of which will be used for real estate project acquisitions, as well as to help the completion of ongoing real estate projects.

Zhaoshang Shekou issued two instruments – a 3-year note with a coupon rate of 2.89% and a 5-year note with a coupon rate of 3.3%.

The Jianfa issue raised 1 billion yuan, with proceeds to be used for the acquisition of equity in two real estate companies. Jianfa issued two instruments – a 3+3 year note with a coupon rate of 3.48%, and a 5+2 year note with a coupon rate of 4.5%.

State-owned media said the successful underwriting of the instruments served to “open up a new channel for merger and acquisition finance, fuelling employing bond business innovation in driving the healthy development of real estate and its active role in positive circulation.”