Zhejiang Energy debuts $300m bond

Zhejiang’s largest power generator raises the first bond from a Chinese provincial government, riding on China’s better-than-expected manufacturing data.
Zhejiang Provincial Energy Group is the largest power generator in Zhejiang province
Zhejiang Provincial Energy Group is the largest power generator in Zhejiang province

Zhejiang Provincial Energy sold a $300 million three-year bond on Tuesday, raising it hot on the heels of China’s better-than-expected manufacturing numbers.

The offering, which is Zhejiang Provincial Energy’s inaugural issuance in international debt capital markets, was issued by its subsidiary Zhejiang Energy Group. The Reg S-registered bond was supported by keepwell and liquidity support deeds, and an equity interest purchase undertaking from the parent. As such, it has an expected ratings of A2 and A from Moody’s and Fitch respectively.

Given its state-owned status and relatively strong credit ratings, the borrower was able to tighten pricing by a hefty 30bp from an initial price guidance...

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