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Guantao assists a municipal-level urban investment platform in a key southwestern province for debt resolution in issuing PPN 

Guantao Law Firm assisted a municipal-level urban investment platform in a key southwestern province for debt resolution in issuing the private placement note (PPN) on August 6, 2024, which was listed on August 9, 2024. 

This PPN was registered with the National Association of Financial Market Institutional Investors ("NAFMII"), and issued in a targeted manner to selected specific institutional investors, with coupon of 3.95%, the issuance size of nearly RMB1.8 billion, the maturity of the note being 5 + 3 + 2 years, and the latest corporate rating being AA +. 

The controlling shareholder of the issuer is the state-owned assets supervision and administration commission of the city holding 100% of the shares, and the actual controller is the people's government of the city.  The issuer is mainly responsible for the construction of highways, urban infrastructure, real estate development and land consolidation in this city. 

According to Circular No.35, multiple measures shall be taken simultaneously to mitigate the risk of existing debts on the financing platform. Under the premise of implementing the debt resolution responsibilities of local governments and strictly controlling the debt increase on financing platforms, the continuation of open market note financing due this year and the next year on the financing platform of key provinces shall be particularly supported, borrowing with new bonds to repay old bonds with old ones shall be specially supported and the scale of outstanding bonds shall be steadily reduced.  Key provinces may, under the premise of compliance with laws and regulations and prevention of cross-infection of risks, borrow and repay bonds in a unified manner within the annual bond issuance quota. 

This PPN complies with the spirit of Circular No.35, is conducive to relieving the issuer from the short-term debt repayment pressure and optimizing the debt structure of the issuer, and will exert a positive impact on the daily management, production and operation and debt repayment ability of the issuer. 

Guantao Law Firm acted as the PRC legal counsel for this PPN.  The team was led by Guantao partner Mr. Xue Zhihong, and assisted by Xiao Yueyao and Wu Xing who participated in the whole process.  They completed the professional legal services such as due diligence, on-site interview and issuance of legal opinions. Upon the review by the members of Guantao internal examination group, the team finally assisted the client in successfully issuing this PPN.