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Yanzhou Urban Construction Investment Co., Ltd. Granted NDRC Approval for Issuing SME Credit-Enhanced Collective Bonds Under the Guidance of Dacheng

The National Development and Reform Commission (“NDRC”) recently gave approval to Shandong Yanzhou Huimin Urban Construction Investment Co., Ltd. for its planned issuance of small- and micro-enterprise (SME) credit-enhanced collective bonds sized at no more than 800m yuan. The fund to be raised would be administered by banks and distributed in the form of entrusted loans to SMEs within Yanzhou District, Jining and those located elsewhere in Jining, as long as they receive municipal government approval and qualify for support.

This is the first such approval given by NDRC since the commission started to encourage more pilot issuances of SME credit-enhanced collective bonds. The six-year-term bonds, with an embedded put option for investors, would be underwritten by Huatai United Securities Co., Ltd.. Moreover, a multi-layered risk mitigating arrangement, where the issuer prepares a reserve fund for risk, the government sets up a risk-mitigating fund and opens a credit record for the issuer, will be put in place.

A Dacheng team led by senior partner Guo Qing guided the issuer through the application process at NDRC. The team also included attorneys Xiong Zhou and Wen Bin.