"The Chinese offshore bond market remains an integral part of the multi-level capital market, playing a significant role in assisting Chinese enterprises in their 'going global' strategy and the internationalization of the RMB," stated Dr. Larissa Wu during an interview. Dr. Larissa Wu shared her insights on Chinese offshore bond issuance from 4 perspectives:
Focus on Project Selection and Risk Control: When seeking financing through offshore bonds, Chinese enterprises should prioritize the selection of projects with underlying operational cash flows. Attention should be given to actual business needs and overseas expansion requirements, assessing the match between debt growth and asset yield, and strictly controlling debt risk.
Cost Management and Issuance Structure: Companies should consider the channel costs and interest rate environment to choose the appropriate issuance structure and currency, controlling issuance costs and arranging debt maturity reasonably.
Attention to Issuance Terms and Risk Mitigation: Pay close attention to the trigger clauses related to default events, cross-defaults, and asset restructuring in the issuance terms. Also, consider the provisions regarding the performance of guarantee responsibilities under guaranteed issuance to avoid related risks.
Enhancing Information Disclosure: Strengthening information disclosure through credit rating agencies can better connect with overseas investment institutions, mitigating the risk of information asymmetry and helping to optimize and expand the investor base.
Dr. Larissa Wu
Head of Corporate and Financial Institution Ratings, CSPI Ratings
Report Overview
To provide operational funds for its Argentine lithium brine project, Ganfeng Lithium (002460.SZ) announced that it would issue bonds worth up to USD 200 million (approximately 1.452 billion RMB) or other equivalent currencies outside of China.
Dr. Larissa Wu, Head of Corporate and Financial Institutions Ratings at CSPI Ratings, told the Shell Finance reporter that when Chinese enterprises seek financing through Chinese offshore bonds, they should first focus on the selection of projects with underlying operational cash flows, actual business needs, and overseas expansion requirements. They should also assess the match between debt growth and asset yield, and strictly control debt risk.
About CSPI Ratings
CSPI Ratings, headquartered in Hong Kong, is an international credit rating agency. Licensed by the Hong Kong Securities and Futures Commission in 2012, CSPI Ratings combines globally recognized credit analysis with a unique perspective on emerging markets. It provides globally benchmarked credit ratings and original credit research for the global capital market.
As a member of China Securities Credit (CSCI) group, CSPI Ratings is the international brand wholly owned by CSCI Pengyuan, a leading domestic credit rating agency in China.
Global Rating Services Contact
Email: globalservice@cspi-ratings.com
Media Contact
Email: media@cspi-ratings.com