On March 29, 2018, Guangdong Technology Financial Group Co., Ltd. (“Technology Financial Group”) obtained approval from the China Securities Regulatory Commission for its RMB 2.5 billion public issuance of 2018 corporate bonds to qualified investors (the “18 YK Bonds”). The first tranche of the 18 YK Bonds in a principal amount of RMB 1 billion (Short Name: 18 YK Bonds 01; Code: 112685.SZ) were issued on April 25, 2018 at a coupon rate of 4.97% for a term of 7 (5+2) years. The second tranche was grouped into two types subject to claw-back provisions and the issuance was completed on July 18, 2018. It was valued at RMB 1.5 billion, of which the aggregate issuance amount of the bonds with a term of 7 (5+2) years (Short Name: 18 YK Bonds 02; Code: 112730.SZ) was RMB 1.2 billion at a coupon rate of 4.8%, and the aggregate issuance amount of the bonds with a term of 5 (3+2) years (Short Name: 18 YK Bonds 03; Code: 112731.SZ) was RMB 300 million at a coupon rate of 4.67%. JunHe represented the issuer in this bond issuance.
Technology Financial Group is a wholly state-owned enterprise endorsed by the Guangdong Provincial Government, and was one of the first venture capital institutions formed in China. It was also the first provincial group in the technology finance sector in China. By structuring the integration of fund investments, venture capital investments, financial services and asset management, Technology Financial Group has established an approach characterized by “focusing on venture capital and integrating various business segments into one system”. To date, the registered capital of Technology Financial Group is RMB 9.6 billion, and its assets total RMB 35.4 billion, with net assets reaching RMB 20.7 billion. There are a total of 12 government guidance funds and 50 investment funds under its management, in an amount exceeding RMB 50 billion in aggregate. Technology Financial Group has provided financing services for more than 2000 technology enterprises and assisted more than 60 enterprises in completing their IPOs or listing on the NEEQ.
Acting as the legal counsel to Technology Financial Group in this bond issuance, JunHe conducted legal due diligence review on the issuer, provided legal opinions and other assurances with regard to the application for the public issuance, as well as the offline inquiry and allotment and the listing of the 18 YK Bonds on the stock exchange. JunHe assisted to guarantee the project’s progress and selected a favorable market window for the issuance. With JunHe’s assistance, the bond issuance was completed at a coupon rate far lower than the average price and enjoyed high recognition. With regard to various major or difficult issues encountered in the bond issuance, JunHe offered its highly effective expertise to work with the principal underwriter and other transaction parties to deploy solutions. In particular, JunHe employed an innovative solution to the use of proceeds in the method of “straight bonds” to help the client eliminate the restrictions on the use of proceeds raised from the “entrepreneurship and innovation fund” for funding working capital and debt repayment. JunHe has represented Technology Financial Group in all of its public bond issuances, helping the client ensure the aggregate issue size of RMB 5 billion. JunHe’s lawyers were highly recognized by the client and the principal underwriter for their efficient and prudent delivery of professional expertise and services.