Recently, Datang International Power Generation Co., Ltd (stock code: 601991) successfully issued the first issue of medium-term notes for the year of 2023 (special bonds for energy supply guarantee) in China Association of Inter-bank Market Dealers (CAIMD), with the base issue size of RMB 2 billion, the upper limit of the issue amount of RMB 3 billion, and the actual issue amount of RMB 3 billion, and the issue term of 3+N years.
King&Capital Law Firm, as a member of the China Association of Interbank Market Dealers and the legal advisor of Datang International Power Generation Co. In the course of the offering, led by Mr. Liu Jingxia, senior partner and partner-in-charge of the financial department of the firm, the host lawyers including Mr. Fan Litao issued relevant legal opinions, and the partners Mr. Cheng Guang and Mr. Wang Ying provided comprehensive legal support for this purpose, which jointly guaranteed the efficient and smooth completion of the legal service work of the offering.
The issuance of this issue was conducted in the form of centralized book-entry filing. Centralized bookbuilding is a systematic and market-oriented issuance method. Centralized bookbuilding means that the lead underwriter, as the bookrunner, realizes centralized bookbuilding processing in the centralized bookbuilding system, summarizes the interest rate (price) and quantity willingness of members of the underwriting syndicate/investors to subscribe for the debt financing instruments, and then determines the final issuance interest rate (price) and conducts the placement in accordance with the agreed pricing and placing method. The bookbuilding issuance method is widely used in bond markets of various countries. Issuance through a centralized bookbuilding system is conducive to ensuring compliance of the issuance process and improving market efficiency. The vast majority of domestic large-scale corporate bonds, corporate bonds and non-financial corporate debt financing instruments are issued through bookbuilding. The issuer directly receives subscription orders from investors in the bookbuilding process, and the final issuance rate is determined based on the bidding results of investors. Competition among investors in the bookbuilding bidding process can effectively improve the pricing efficiency, especially in the case of market stability or market improvement and strong investor demand, which is more likely to enable the issuer to obtain a more favorable issuance rate.
The Offering adopts a dynamic adjustment mechanism for the Offering Amount. After the closing of the subscription time, if the subscription exceeds the base issue size, the bookrunner will arrange all the compliant subscription orders one by one according to the subscription rate from low to high, and take the last adjusted issue amount as the actual issue amount, and the corresponding subscription rate as the final issue rate. In the centralized bookbuilding, if the total effective subscription amount is less than the base issue size, the interest rate range may be increased and bookbuilt again, or the actual issue amount may be scaled down in consultation with the relevant parties, or the issuance may be postponed or cancelled, and reissued at an opportune time.
