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Green Finance / Treasury & Capital Markets
EEP China issues carbon neutrality bond
US$105.4 million ABNs mark debut of firm’s quality assets in domestic capital market
The Asset 1 Jan 2022

Everbright Environment Protection (China), or EEP China, has completed the 672-million-yuan (US$105.4 million) issuance of Everbright Environmental Protection (China) Limited Series 1 Green Private Placement Asset-backed Notes (Carbon Neutrality Bond) for the year 2021 (Carbon Neutrality ABN Series 1).

With a maturity period of three years, the offering was fully subscribed for by the qualified institutional investors, and it is considered China’s first carbon neutrality-linked asset-backed notes (ABNs) that use receivables relating to the national subsidies for renewable energy power prices for municipal biomass power generation projects as the underlying assets.

The proceeds from the issuance, which also marks the debut of EEP China’s quality assets in the domestic capital market, will be used by the company and its subsidiaries principally for the replenishment of working capital and repayment of debts to financial institutions.

The issuance comprises preferential and subordinated ABNs. The preferential ABNs have an issue size of 645 million yuan, a maturity rate of 3.52% and a subscription rate of 2.85 times, with an AAA credit rating by Golden Credit Rating International. The subordinated ABNs have an issue size of 27 million yuan. Everbright Securities Company acted as lead underwriter for the issue. 

EEP China received approval in December 2021 from the National Association of Financial Market Institutional Investors of the People’s Republic of China to issue yuan-denominated ABNs in single or multiple tranches to institutional investors in the national inter-bank bond market of China, with a total registered issue size not exceeding 2 billion yuan.

This year, EEP China's parent company China Everbright Environment Group, together with its subsidiaries, completed issuances of medium-term notes, ABNs, and super and short-term commercial papers, all of which raised more than 5 billion yuan.

This, according to the group, not only enhances the diversity of its financing channels, but has also replenished its working capital, optimized its financing structure and kept its financial costs within a reasonable range. 

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