On June 18, July 28, August 8 respectively, Zhejiang Penggong Bamboo Product Co., Ltd., Yancheng Yandu Transport Development Co., Ltd. and Zhejiang Himpton New Material Co., Ltd. received notices from Shanghai Stock Exchange and Shenzhen Stock Exchange on successful filing of small- and medium-sized enterprise (“SME”) private bonds. A finance and securities team from Dacheng’s Hangzhou office worked with Everbright Securities, Huachuang Securities and Citic Securities in advising the three businesses on SME private bond issue. 

The Hangzhou-based team has advised nine out of a few hundred enterprises which had successfully filed with the two exchanges prior to official issuances, since the type of bond were first introduced in June 2012. With a two- or three-year maturity and permitted flexibility on guarantee and credit enhancement matters, the bond is much popular with SMEs. Besides, categorized by China’s finance regulator as standard credit assets, it is also used by financial institutions (e.g. banks) as a means of making adjustment to the size of their non-standard equity assets. 

The team grasps this finance reform opportunity by forging closer ties with local banks and securities companies to expand business together in SME private bond, which is also beneficial to SMEs seeking finance. Right now, quite a number of quality SMRs are in the pipeline to try their hand in private bonds. 

The Hangzhou-based finance and securities team composed of attorneys Zhao Chaopeng, Zhang Ting, Wu Changfu, Wu Liang and Zhang Wei has attracted not only local clients, but also those from Beijing, Shanghai, Hebei, Jiangsu and Guizhou since it was formed a year ago, advising them on a diversity of matters, including asset securitization, corporate bond, small- and micro-enterprise credit-enhanced collective bond, mid-term notes, PPN, municipal bond and NEEQ listing.