On July 20, China Minmetals Corporation issued 5-year foreign bonds worth USD 300 million and 10-year bonds worth USD 700 million at a spread of T5+205 basis points and T10+265 basis points, respectively. Compared with the debut of the United States dollar-denominated bonds in 2015, this offering is a greater success in terms of prices, subscription ratio and investor structure. It has fully demonstrated the leadership and outstanding long-term credit of Minmetals in the industry. It, therefore, serves as a benchmark in bond issuance in the Asian bond market in recent years.

During the offering, through flexibly combining non-deal roadshows in Europe and deal roadshows in Asia, Minmetals timely seized favorable opportunities, especially a historically low US Treasury bill rate, a subsiding market impact by UK’s retreat from the EU referendum, and a slim expectation on Fed’s rate hike in July. More importantly, there is no competition on the date of pricing. Despite the current downturn in the metal and mining industry and a high financial leverage as a result of previous major strategic investment, this offering attracted a great number of investors, mainly thanks to the smooth operation of Minmetals’s Las Bambas Project, the restructuring of MCC, pilots of state-owned capital investment companies, the maintenance of a good credit rating (Moody's Baa1/Fitch BBB+), a clear strategy direction and effective initiatives.

This offering has been highly favored by well-known international funds, banks, insurance companies and other investors. Compared with the top 10 investors of the offering in the last year, top investors are more diversified, with a significant increase in high-quality investors from assets management and insurance industries. The 5-year bonds were subscribed by 137 investors for USD 2 billion, or a subscription ratio of 6.6 times (twice as much as that of last year), while the 10-year bonds were subscribed by 185 investors for USD 3.5 billion, or a subscription ratio of 5 times (twice as much as that of last year). 10% and 8% of the subscribers of the 5-year bonds and the 10-year bonds were stable and high-quality long-term investors from Europe, respectively. In addition, 17% and 12% of the subscribers were from the industry of sovereign funds.

This new offering took full advantage of the favorable situation of active and extensive subscription. Thanks to a proactive pricing strategy, the two types of bonds both witnessed a double-digit negative premium (lower than the fair price of the secondary market). The final price of the 5-year bonds was 3.199% (T5+205bps), 41 basis points lower than last year; the final price of the 10-year bonds was 4.244% (T10+265bps), 52 basis points lower than last year.

The offering team was led by CFO Shen Ling. Zhang Shuqiang, General Manager of Minmetals Finance Division; Xu Zhongfen, General Manager of Corporate Planning and Development Department of Minmetals; Chen Xingwu, Deputy General Manager of Finance Division; and Cao Liang, General Manager of Minmetals Overseas Mining Division of Minmetals International participated in the roadshows and book building and pricing.