On 13 June 2019, Guangzhou Rural Commercial Bank Co., Ltd. (1551.HK) (“GRCB”), a leading rural commercial bank in China and the first listed domestic bank from Guangdong Province, successfully priced its US$1.43 billion AT1 capital offshore preference share offering (the “Transaction”). AMTD acted as the Sole Financial Advisor, Sole Ratings Advisor, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager on this Transaction. This Transaction marks the first ever offshore preference share offering by a Chinese rural commercial bank and opens a new capital raising channel for all rural commercial banks in China. Moreover, this Transaction is the first and the largest offshore preference share offering by a Chinese regional bank in 2019 year-to-date, and it is the only offshore preference share offering by a Chinese regional bank with an investment grade entity rating by two international credit rating agencies (Moody’s and S&P).
GRCB is one of the largest rural commercial banks in China (in terms of Tier 1 capital) and the largest rural commercial bank in Guangdong Province and the Greater Bay Area. Based in Guangzhou but with a countrywide ambition, GRCB has a prominent geographical advantage and superb development prospects. With nearly 70 years of history, it can be traced back to the first rural credit cooperative established in Guangzhou in 1952, which was restructured and established as GRCB in 2009. In May 2018, two internationally renowned rating agencies Moody’s and S&P assigned GRCB long-term credit ratings of “Baa2” and “BBB-“ respectively. These are the highest international credit ratings ever obtained by a Chinese regional bank, even surpassing some national scale joint-stock commercial banks. Additionally, GRCB is the only Chinese regional bank in history to obtain two investment grade international credit ratings. AMTD acted as the Sole Ratings Advisor for GRCB in obtaining the credit ratings.
GRCB’s US$1.43 billion offshore preference share offering is one of the largest offshore preference shares offering by Chinese regional banks in recent years. Despite the volatile macroeconomic environment, under the overall successful leading by the bank’s management team, GRCB proved attractive to investors with its solid international credit ratings, sound financial strength, proven market presence and strong brand: the Transaction was announced, bookbuilt and priced within one day. This offering not only is another important testament to GRCB’s innovative and effective approach to capital raising and replenishment, but also sets a prominent example for the international development of China’s regional banks, especially rural commercial banks.
AMTD has established a close and long-term partnership with GRCB and led all of GRCB’s offshore capital market transactions. In June 2017, AMTD acted as the Sole Financial Advisor, Joint Global Coordinator, Joint Bookrunner, and Joint Lead Manager for the H-share IPO of GRCB, helping GRCB to successfully enter the international capital market. Raising over US$1.1 billion, it was one of the largest IPOs of financial institutions in Hong Kong’s capital market in 2017. In May 2018, AMTD acted as GRCB’s Sole Ratings Advisor and assisted GRCB to obtain long-term credit ratings of “Baa2” and “BBB-“ from Moody’s and S&P, respectively, helping it to become the only Chinese regional bank in history with two investment grade international credit ratings. Furthermore，as the Sole Financial Advisor to Zhujiang Financial Leasing Co., Ltd., a GRCB subsidiary，AMTD assisted in successfully obtaining international a syndicated loan from the Asian Development Bank and contributed to the formation of its strategic partnership with the Asian Development Bank.
AMTD has always been committed to serving the international development of Chinese financial institutions, especially regional banks. Since 2016, AMTD has frequently acted as a Joint Global Coordinator and successfully executed almost all H-share IPOs and offshore preference share issuances for Chinese regional banks, including Bank of Qingdao, Zhongyuan Bank, GRCB, Bank of Zhengzhou and Bank of Jinzhou. This outstanding track record once again demonstrates AMTD’s leadership and expertise in deal execution and distribution capabilities in offshore capital market transactions for Chinese regional banks. Witnessed by the Hong Kong SAR Government during the 2018 Hong Kong Fintech Week, AMTD, along with Zhongyuan Bank (1216.HK), Jiangxi Bank (1916.HK), GRCB (1551.HK), Bank of Qingdao (3866.HK) and other Chinese regional banks, announced the establishment of “Regional Banks + Strategic Cooperation Alliance”. This is an initiative committed to maximizing sharing and utilization of resources, cooperating and communicating across members, as well as the dedicating to innovation and development of fintech, smart finance, financial inclusion, and green finance.