CTG successfully issues $850 million in medium- and long-term bonds

China Three Gorges Corporation (CTG) announced on October 16 that it has successfully completed the issuance of $850 million in medium and long-term Reg S bonds. The issuance was comprised of $500 million worth of bonds with a five-year maturity and a yield of 2.35 percent and $350 million of bonds with a 30-year maturity and a yield of 3.20 percent.

The proceeds raised will be mainly used to replace the bridge loan for CTG’s Empresade Generación Huallaga S.A. project, a hydropower project in Peru. With this issuance, CTG helped further steepen the yield curve of overseas markets, extended debt duration and achieved a good pricing level. The issuance once again demonstrated the strength of CTG's brand in capital markets.

Following the completion of a non-deal roadshow in July, CTG actively prepared for the issuance and closely scrutinized the market. CTG accurately predicted the downward trend of treasury bond yields during China’s National Day holidays and quickly locked the market during the strong fluctuations on the issuance day.

The issuance helped steepen the yield curve and set a benchmark for high-quality Chinese bond issuers. With the successful first issuance of 30-year US dollar-denominated bonds, CTG established a complete USD dollar bond yield curve based on the previous issuance of 5 - and 10-year USD dollar bonds.

The issuance received strong demand from investors and fetched attractive pricing. The 30-year bond’s yield is the lowest interest rate in the history of the issuance of 30-year USD dollar bonds by a Chinese enterprise or financial institution, locking in long-term and low-cost funding for the group's strategic development.

The 5-year bond’s yield is the lowest in nearly three years for a Chinese company compared with same-term dollar bonds. Both terms realized negative new issue premiums, including a negative new issue premium of 3 and 6 basis points for the 5-year term and 30-year term respectively.

Bank of China, Deutsche Bank and JP Morgan Chase acted as global coordinators for the issuance, while ICBC, Mizuho Securities, Standard Chartered Bank, Morgan Stanley, Citibank, UBS and Citic CLSA served as co-bookkeepers.