Slaughter and May’s Hong Kong lawyers advise MTR Corporation on its one billion yuan-denominated bonds issued in June.
Companies, both local and foreign, are tapping into the city’s burgeoning pool of offshore renminbi deposits. Investors have a growing demand for yuan investment products as many of them expect the Chinese currency continue to grow.
The metro giant’s first offering of dim sum bonds in Hong Kong followed the footsteps of Caterpillar Inc., McDonald’s Corp. and the World Bank, which recently issued dim sum bonds to take advantage of attractive prices. Hong Kong’s budget carrier — Hong Kong Airlines — announced plans in May to issue the yuan notes in the near future.
MTR’s notes will mature in June 2013 and carry an annual coupon of 0.625 percent, paid every six months. The issuance is part of the company’s US$3 billion debt issuance program. MTR’s bond offering provides cost-effective financing for the metro company’s railway project in Shenzhen, China.
Slaughter and May serves as the Hong Kong and English law advisers to MTR Corp. (Cayman Islands) Ltd. and the MTR Corp. Ltd., the issuer and guarantor of the notes. The firm’s Hong Kong partner Laurence Rudge said since English law governed the notes and MTR has handled the process of obtaining relevant PRC approvals in-house, there isn’t a Chinese law firm involved in the issuance.
Rudge’s team was supported by Hong Kong associates Roger Cheng and Victoria Pang.
RMB deposits in Hong Kong have grown six-fold to 511 billion yuan as of April from a year ago. Outstanding yuan-denominated assets, mostly bonds, have grown to approximately 130 billion yuan.
