DeHeng Advised Shenzhen Metro on Issuing

the First Epidemic Prevention and Control Bond Worth RMB 3 Billion

2020-02-21

On February 19, 2020, Shenzhen Metro Group Co., Ltd. (hereinafter referred to as "Shenzhen Metro") successfully issued its epidemic prevention and control bonds, which is the very first one in the country's rail transit industry, as well as the first one issued by units under Shenzhen Municipal State-owned Assets Supervision and Administration Commission. The bond name was "Shenzhen Metro Group Co., Ltd.'s corporate bonds (Tranche I) (epidemic prevention and control bonds) to eligible investors in 2020," short-named as "20 Shenzhen Metro 01". It was a 3-year fixed-rate bond (coupon rate: 3.05%) with a credit rating of AAA/AAA to raise RMB 3 billion. After deducting the issuance expenses, no less than 10% of the raised money will be used to replenish the working capital, including but not limited to the epidemic prevention and control at metro lines such as swapping existing epidemic expenditure, purchase of anti-epidemic materials, temperature measurement, security check and carriage disinfection, other measures to ensure the security of public transportation and maintain the normal operation of the metro system, and replenishing the working capital deficiency caused by the rental deduction granted to property leases for the epidemic. And the rest will be used to service the company's interest-bearing debts during the epidemic.

Founded on June 23, 1998, Shenzhen Metro is a wholly state-owned enterprise directly under Shenzhen State-owned Assets Supervision and Administration Commission. Thanks to Shenzhen Stock Exchange's recent supportive policy for the issuance of epidemic prevention and control corporate bonds, the successfull issuance of this bond will help Shenzhen Metro effectively respond to the COVID-19 epidemic and ensure safe public transportation for the Shenzhen citizens.

As the legal counsel for the issuer, the DeHeng team, led by Su Qiyun and Liu Shuang, partners of its Shenzhen office, with primary support from lawyers Huangfu Tianzhi, Wang Yang, Chen Siyi and Qin Yuge, provided Shenzhen Metro with professional, comprehensive, efficient services, including issuing legal opinions according to relevant laws, regulations and regulatory requirements, assisting in reviewing the prospectus and underwriting agreement, and witnessing the subscription process.