CDB Issues $500MM of Senior Unsecured Notes Under $3B Medium Term Note Program



CDB Aviation, a wholly-owned Irish subsidiary of China Development Bank Financial Leasing (CDB Leasing), issued $500 million of senior unsecured notes in a Regulation S (Category 2) bond offering. The proceeds will fund new capital expenditure, debt refinancing, working capital and other general corporate purposes.

The notes were issued by CDBL Funding 1 and guaranteed by CDB Aviation under the companies’ $3 billion medium term note program, which is rated A1 by Moody’s and A+ by Fitch, and has the benefit of a keepwell and asset purchase deed provided by CDB Leasing.

“The issuance represents our ongoing efforts to enhance the company’s diversified capital structure, demonstrating our increasingly strong liquidity profile and credit metrics,” Brendan O’Neill, CFO of CDB Aviation, said.

The notes were priced at the 1.5% three-year senior unsecured fixed rate of 99.909% to yield 1.531%, or Treasuries plus 135bp, which is inside the initial price guidance of the 170bp area. The new bonds achieved a negative new issue premium and the lowest-ever priced coupon for a China-based lessor’s fixed-rate public U.S. dollar bond, according to CDB Aviation.

Despite a congested primary market with 11 trades coming from Greater China on the same day, orders were more than $1.7 billion when final price guidance was announced, including $800 million from the leads.
Patrick Hannigan, CEO of CDB Aviation, said that “the resounding success of this bond offering underscores our platform’s core strengths” and demonstrates the CDB Aviation team’s “unfaltering commitment to our long-term vision.”

Standard Chartered Bank, Bank of Communications, China Citic Bank International, Mizuho Securities, ANZ, Haitong International, ICBC Singapore, Guotai Junan International, CMB International and Natixis were joint global coordinators. They were also joint bookrunners and joint lead managers with China Minsheng Banking Corp Hong Kong branch, ABC International, China Securities International and CTBC Bank.

“This issuance sets the stage for the continued development of our in-depth relationships with leading global financial institutions. We would like to express our appreciation to CDB Leasing for their continued support anchored with China Development Bank’s unique resources, and to our lenders for their trust and participation in strengthening our capital base,” O’Neill said.


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