DeHeng Advised CR Leasing on Issuing the First

“Poverty Alleviation and COVID-19 Response” 

Asset-backed Notes (RMB 795 million) and the First Targeted

Debt Financing Instrument for COVID-19 Response (RMB 500 million)

2020-03-10

On March 4, 2020, China Resources Leasing Co., Ltd. (hereinafter referred to as "CR Leasing") successfully issued the first poverty alleviation and COVID-19 response asset-backed notes in China, to raise a total of RMB 795 million. The issuance was the first public offering of asset-backed anti-coronavirus notes by a central government-owned enterprise in the country. With a credit rating of AAA, CR Leasing 2020 Tranche-1 Asset-backed Notes for Poverty Alleviation (COVID-19 Response Bond) were abbreviated as "20 CR Leasing (COVID-19 Response Bond) ABN001 Priority A1," "20 CR Leasing (COVID-19 Response Bond) ABN001 Priority A2" and "20 CR Leasing (COVID-19 Response Bond) ABN001 Secondary." The notes were enthusiastically subscribed on the day of issuance. The final coupon rate of Priority A1 notes and Priority A2 were 3.30% and 3.68%, respectively, which were among lowest for bonds issued in the same industry and with the same term. The money raised will be preferentially used for targeted poverty alleviation projects aiming to stimulate employment, drive the development of related industries, and help fight poverty. It will also be used for supporting the medical and health industry to help the country fight COVID-19. 

Previously on February 28, 2020, CR Leasing issued the first debt financing instrument for COVID-19 response, known as "20 CR Leasing (COVID-19 Response Bond) PPN001" for short, the first of its kind issued by a central government-owned enterprise and in the Guangdong-Hong Kong-Macao Greater Bay Area. It raised a total of RMB 500 million, with a credit rating of AAA, a term of 2 years, and a coupon rate of 3.85%. The money raised would first go to the financial leasing projects of hospitals designated for COVID-19 treatment, including sourcing medical apparatus, protective equipment and other medical supplies.

Founded on June 27, 2006, CR Leasing is a specialized financial leasing company under China Resources Group, affiliated to China Resources Finance, and one of the headquarters-level leasing companies receiving priority support from Qianhai Free Trade Zone. Its main business includes financial services such as financial leasing, management consulting and business factoring. CR Leasing actively responds to the COVID-19 battle and targeted poverty alleviation, takes the initiative to give full play to its industry expertise, and has raised special-purpose funds to fund the anti-poverty and anti-pandemic frontline. 

As the lawyer of CR Leasing for its offering of the above notes and debt financing instrument, the DeHeng team was led by the partners Su Qiyun, Lai Yifeng and Huangfu Tianzhi in its Shenzhen office, with primary support from senior lawyers Deng Yuge, Chen Siyi and apprentice lawyer Wang Jiutao. They have provided professional, comprehensive and efficient legal services for the client, including issuing legal opinions in accordance with relevant laws, regulations and regulatory requirements, drafting full set of legal documents for the deal, and assisting in reviewing the prospectus, underwriting agreement and other documents.