DeHeng Advised Canlon on Issuing the First Green Bonds

for Innovation and Entrepreneurship against COVID-19

2020-03-12

On March 11, 2020, Jiangsu Canlon Building Material Co., Ltd. (hereinafter referred to as "Canlon" ) successfully issued the country's first green corporate bonds for innovation and entrepreneurship against COVID-19 on Shenzhen Stock Exchange (SZSE), and established the credit protection contract for it (hereinafter referred to as "the issuance"). Canlon was listed on the SZSE on October 26, 2017, and its main products are new-type waterproof building materials, including polymer coil materials, asphalt-based coil materials, polyurethane coating, polymer cement coating and polymer self-adhesive tape, etc. It has a relatively complete waterproof product line in place.

The non-public issuance would raise no more than RMB 50 million, with a coupon rate of 5%. And 30% of the money raised will be used to support the resumption of production of Canlon New Materials Co., Ltd. in Huanggang of Hubei Province, the epicenter of COVID-19 outbreak in China, and the rest 70% for corporate transformation and upgrading and for building a world-leading production line for new-type waterproof materials.

Thanks to the favorable policies recently introduced by China Securities Regulatory Commission, Jiangsu Securities Regulatory Commission and SZSE for the issuance of innovative quality corporate bonds for COVID-19 response, it took only eight working days for Canlon to complete the entire process from application to receiving the money raised which will help the company replenish the loss caused by COVID-19 and develop pioneering and innovative projects.

As the legal counsel for the issuance, the DeHeng Suzhou team, led by partner Chen Haixiang, with primary support from partner Wu Xiaojing, lawyer Qiao Peng and trainee lawyer Luo Wen, worked with partner Pu Hong from Shenzhen office, lawyer Qi Xin from Beijing office, partner Meng Chen and trainee lawyer Zhao Liang from Suzhou office to complete the internal audit and review of the issuance. In accordance with laws, regulations and regulatory requirements and in partnership with Canlon and the lead underwriter, Deheng lawyers provided professional, comprehensive and efficient legal services, including issuing legal opinions for the issuer and assisting in reviewing the prospectus and underwriting agreement.