Rusal Prices Second Tranche of Historic Panda Bonds
02 September 2017 by Staff
Russian Federation aluminium titan U.C. Rusal has priced the second tranche of Panda Bonds according to an announcement released by the firm yesterday.
According to the company’s press release, the second tranche has a total principal amount of CNY500 million (USD76 million, RUB4.4 billion), a tenor of 2+1 years, and a coupon rate of 5.5% per annum. The offering is expected to close this coming Tuesday, September 5.
The offering was arranged by China International Capital Corporation Ltd. (CICC), one of the country’s leading investment banking firms. CICC will be serving as the bonds’ lead manager and bookrunner.
Rusal’s Director for Strategy, Business Development and Financial Markets Oleg Mukhamedshin lauded the second tranche as proof of interest on the part of Chinese investors in the firm’s operations in their country.
“RUSAL successfully taps the Chinese bond market through the second placement on the Shanghai Stock Exchange. We are very pleased to see continuous interest from Chinese investors and their support to RUSAL as the first overseas company with global operations outside of China to enter this market.”
As was the first tranche, Rusal says that it plans to use the proceeds to provide working capital the company needs in purchasing from Chinese vendors, among other needs. The remainder will be used to refinance company debt.
This offering is historic in nature, as it represents the first time a foreign company with global operations outside of China has entered the Chinese bond market via the Shanghai Stock Exchange.
Rusal issued a prospectus for a bond issue totaling up to CNY10 billion with a seven-year tenor. The firm won a AA+ corporate rating with a Stable outlook from the China Chengxin Securities Rating Company (CCXR), which is among China’s top credit-rating agencies. The tranche (and all such tranches totaling up to CNY2.4 billion) is guaranteed by China United SME Guarantee Corporation.