Who are China's Best Service Providers and Borrowers?

In the first part of our China awards, FinanceAsia is delighted to reveal the winners and rationale behind the awards for Service Providers and Best Borrowers this year.

In October, FinanceAsia named the winners of our inaugural China Awards for best domestic and international ratings agencies, best international and domestic law firms and best borrower overall and Belt & Road borrower.

In a four-part series, we will explain the rationale behind our decisions to award institutions that contributed to the positive development of China's capital markets.

FinanceAsia's China Awards 2018 is organised in collaboration with CorporateTreasurer, our sister publication.


In turbulent markets it takes a rating agency of the highest caliber to ensure that its clients both on the investor side and issuer side can get the best assessment of corporate fundamentals in China, where foreign investors often found it hard to convince 90% of the ratings are A or above.

And there is no doubt that China Chengxin (CCX), the country’s largest domestic rating agency by market share, is committed to provide the most comprehensive risk assessment services to its onshore and offshore investors.

Established in October 1992, CCX, in which Moody’s has a 30% stake, is the first national rating agency approved by the Chinese central bank, offering objective and timely credit opinions that reflect its expectations of credit behavior over a range of different scenarios.

Through its more diversified investors base, the rating agency provides the most comprehensive research report from sovereign ratings to local government, providing the most in-depth analysis to investors. The company’s backers include Citic Capital and Boyu Capital.

As part of the company’s commitment to increase transparency, it plans to float its shares for the first time in the coming years, seeking to be the first publicly-traded mainland credit rating agency, according to Yan Yan, chairman of CCX International.


Bond investors in the developed market often find it difficult to assess the latest market condition and policy directions in the $10 trillion Chinese bond market, but the winner of this category demonstrates its research capabilities to help investors better understand the convoluted politics and business circles.

The award recognizes Fitch’s extensive coverage in both government-linked and corporate bonds, having rated more Chinese corporate credits than its major rivals Moody’s and S&P. It covers 74% of Chinese corporate credits from July 2017 to June 2018, compared with 68% by Moody’s and 64% by S&P.

It also produces key industry research that comments on key developments in the country, which continues to provide valuable opinion and timely calls on credit risk. Besides producing research on property developers, it also covers pharmaceutical companies and local-government financing vehicles.

As for the next step of its development, Fitch is now applying for an operating license in China, in a move to enhance the transparency and reliability of the country’s rating systems.


US-based international law firm Davis Polk & Wardwell, which has offices in Beijing and Hong Kong, continued to grow its presence in China over the review period. It added three new partners and three new counsel to its China practice, which brings the number of its lawyers in the China market to more than 100.

During the review period, the firm advised on 64 high-yield deals including Yingde Gases $500 million senior notes due 2023, which used an innovative negotiated covenant package with sponsor-style covenants to get the deal over the line.

Within a large number of investment grade deals, of note was the establishment of Sinopec Century’s $3 billion Medium Term Note Programme. Davis Polk & Wardwell advised the arrangers how to set up a new HK-based financing and investment platform, while ensuring that the new MTN was fully in sync with the financing activities of China Petrochemical Corporation, the programme’s guarantor.

In the M&A space, the firm advised on a broad deal list of inbound and outbound deals, strategic partnerships, JVs, spinoffs, privatisations and investments for clients. Notably it advised China Vanke on its participation in the US$11.6 billion acquisition of Global Logistic Properties – Asia’s biggest-ever private equity acquisition by value.


Marking a first for a Chinese issuer, Hongshi Holding Group, a privately owned cement manufacturer, offered a Rmb300 million ($47 million) three-year corporate bond on the Shanghai Stock Exchange on January 19.

This was the first official Belt and Road bond in China’s domestic market, and it was fully supported by the China Securities Regulatory Commission, the regulator of the exchange-traded bond market.

Hongshi, rated AAA by China Chengxin, priced the three-year notes at par to yield 6.34%. The offering was 2.67 times covered, according to a press release from the Shanghai Stock Exchange.

Proceeds are earmarked for the purchase of equipment for a Rmb300 million cement plant in Laos with an expected daily capacity of 5,000 tons.

As the first officially recognised Belt and Road bond, this issue marks the beginning of a new category of issuance for Chinese companies looking to tap the international and domestic markets. It will also help fund the $1 trillion Belt and Road Initiative and wins this year’s award for breaking new ground in a new category at a competitive price.

Sole underwriter: Guotai Junan Securities


Han Kun Law is a leading full-service law firm with offices in Beijing, Shanghai, Shenzhen and Hong Kong, and over 300 legal professionals in its ranks.

Demonstrating its strength across all sectors it covers, many of the deals that Han Kun worked on during the review period were complex cross-border deals which involved an intimate knowledge of China’s legal regulations and restrictions.

Among other sectors, Han Kun is active in the capital markets, M&A, and private equity markets, and is a leader in complex cross-border and domestic transactions for its clients in China.

In M&A the firm acted as lead Chinese counsel for Rejax Holding, the parent company of Ele.com, during its $9.5billion acquisition by Alibaba in May. It was a complex case which involved both Chinese and Cayman Island law.

Han Kun also acted as Tencent’s PRC law legal advisor in its US$5 billion Global Medium-Term Note Programme, which involved jurisdictions that included China, the Cayman Islands, the UK and New York.

In October 2017, the firm acted as Chinese legal counsel in for Meituan-Dianping, China’s largest O2O services provider, and its $4 Billion Series C round of equity financing.

Acting as China legal counsel to China Literature, the firm provided advice on its HK$8 billion Hong Kong main board IPO, the retail portion of which was oversubscribed 626 times.


China Development Bank (CDB) wins the inaugural Best Borrower award for China in a closely fought decision between several high-quality contenders.

During the review period, CDB expanded its borrowing base outside of its borders and initiated several firsts for the bank.

In November, the bank issued its first international green bond. It sold a €1 billion ($1.16 billion) four-year bond at 0.375% and a $500 million five-year bond at 2.75% on the China Europe International Exchange (CEINEX) market place in Frankfurt. Proceeds are being used to support green industry projects such as clean transportation, renewable energy and water resource protection along the Belt & Road Initiative regions.

At the end of December it sold a $350 million five-year Belt and Road bond with a 3% coupon in Hong Kong via private placement, the first such bond from the China Development Bank in Hong Kong.

In July last year the bank was the first to make use of China’s Bond Connect scheme. It underwrote a $148 million three-year Panda bond for Maybank, Malaysia’s largest bank, at 4.6%. Funds raised by the bond will be used for Belt and Road Initiative projects, and more than 20% of the paper was allocated to foreign buyers.

This makes CDB the only agency involved in the first batch of Bond Connect issues to assume two roles: that of issuer of financial bonds, and principal underwriter of Panda bonds.

For these highlighted and innovative deals, China Development Bank wins the award for Best Borrower.

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