Han Kun Law Offices LLP ("Han Kun Hong Kong") acted as international legal counsel to the underwriters, assisting Shanghai Electric Group Company Limited ("Shanghai Electric", Stock Codes: 02727.HK/601727.SH) in successfully completing the issuance of a three-year RMB1.5 billion green free trade zone ("FTZ") offshore bond on August 19, 2026. The final coupon rate of this bond is 1.80%, setting a new low for offshore RMB bond rates among Shanghai municipal state-owned enterprises.
Free Trade Offshore Bonds are one of the first six pilot initiatives in Shanghai's offshore financial system, undertaking the critical functions of enriching the supply of offshore RMB assets, supporting enterprises in "going global," and advancing institutional opening-up. This transaction is a "first-of-its-kind" deal for the market, setting a significant industry benchmark, representing:
the world's first corporate free trade offshore bond;
the world's first free trade offshore bond listed on the Hong Kong Stock Exchange; and
the largest single-tranche FTZ offshore bond issuance to date.
Shanghai Electric is a globally leading provider of industrial-grade green and intelligent system solutions and a leading Chinese comprehensive equipment manufacturing enterprise. The issuance attracted strong interest from global investors, achieving 12x oversubscription, with the final coupon rate significantly tightened by 60 basis points from initial price guidance. Moody's upgraded Shanghai Electric's corporate credit rating to A3 with a stable outlook, and assigned an A3 rating to the bonds.
The Joint Global Coordinators for this deal include Guotai Junan International, Bank of China, BOC International, BOCOM International, HSBC, ICBC (Asia), ICBC International, and UBS.
Han Kun has long been actively involved in and continuously supported national financial innovation practices. For instance, early this year, Han Kun's Beijing and Hong Kong offices served as the issuer's PRC counsel and international counsel, respectively, to assist Industrial Bank in completing the market's first offshore bonds issued by a bank's Shanghai Free Trade Zone entity, as well as the market's first "Yulan Bonds" issued by an FTZ entity. In January this year, Han Kun Hong Kong, acting as the exclusive international legal counsel to the China-Portugal Fund, assisted it in fully subscribing to the supranational bank New Development Bank's USD 50 million "Lotus Bonds" issued in Macau. In this issuance of green FTZ offshore bonds, Han Kun Hong Kong, serving as international legal counsel to the underwriters, led the entire process, including the structuring of the FTZ offshore bond transaction, drafting of documents, due diligence, pricing, and closing. The team also maintained close communication and coordination with all relevant parties, including China Central Depository & Clearing (CCDC) and the paying agent, ensuring the successful completion of the project. This landmark transaction further demonstrates Han Kun's leading capability in providing clients with integrated, innovative, and high-quality comprehensive solutions amidst the challenging international capital markets environment.
